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Traditional institutions failing SMEs
In a recent governmental report 25,000 SMEs failed to get funding from traditional lenders either VC’s or banks, and the law society says that 40% of SMEs in anyone year faces a serious legal problem because they have not sought legal advice or have poorly drafted and misunderstood contracts. And business advice for SMEs has often been found wanting. This is because the institutions that should be supporting an entrepreneurial market have become institutionalized
And it is ironic that the future of our economy, jobs our future prosperity, comes through startups and SMEs.
A new business eco-system
However there is good news, we are seeing a new eco-system emerge made up of crowdfunding, legal services, new business accelerator programmes, accountancy and even working environments – described as co-working spaces such as Central Working, Shoreditch Works, The Innovation Warehouse or the The Hub from London. Collectively these are offering aspiring entrepreneurs and SMEs the means by which they can move forward and contribute meaningfully to the overall UK economy.
Sound advice for SMEs
There is a saying that when institutions fail people learn to get what they need form each other, and that is what has been happening over the last 5 years, a new eco-systems has been growing (this is not only a UK phenomenon). SMEs or startups can raise funds from platforms such as Crowdcube raising £18m in 2013 a 500% increase from 2012. Crowdfunding is a great place to pre-test a business idea, and the funders become not cold VC types, or rigid bank managers but a committed, engaged, supportive network. Startups can engage with accelerator programmes such as SeedCamp, Ignite 100 or Techstars that gives your business idea a thorough workout, and legal services such as LawBite, or My Barrister, provide the legal support that every SME needs. These are just but a few examples.
This new growing eco-system is the means by which startups and SMEs in the UK will thrive.
Founded by Clive Rich- barrister and international negotiator- LawBite is a digital legal service offering SMEs secure plain English business contracts as well as other legal services at an affordable price. LawBite is an online solution to the legal problems SMEs face.