It is understandable that someone who has just been made
redundant wants to look on the bright side and decides it is the
perfect opportunity to start their own business.
It is equally understandable why governments, eager to
remove them from horrifying unemployment statistics, give them every
encouragement – vocally if not practically.
It might be imagined that those, like the contributors to
this blog, who support free enterprise, and make a living out of it, would
While it may be a good idea for some – perhaps most – to
become their own bosses, governments are being positively irresponsible in
persuading others to set up businesses that are doomed to fail.
1 Running a business
demands that you are able to concentrate all your attention and your energy on
it when required. Many have family or other obligations that may conflict with
this. As a result, they are not there for the business when it needs them – and
often fail in their family or other obligations too.
2 Some people simply
have no head for business and no amount of “training” can make up for it. Note
that business savvy is by no means the same as academic intelligence – a
disproportionate number of self-made multi-millionaires are high school
drop-outs, while the bankers and bureaucrats who got us into the current
economic mess are some of the best-educated people in the world. However, no
amount of hard graft can make up for a failure to grasp the few basic
principles on which all business depends.
3 Anyone who goes
into business because the government encourages them is not going to be able to
cope with the harsh truth that the same government will then put obstacle after
obstacle in the way of their success and their survival.
4 Many whose
experience of life is limited to an inadequate education, followed by secure
employment, have no idea of the initiative, flexibility, and endurance
necessary to run a real business.