Interviews

5 companies and ideas that used government initiatives to grow

12 min read

11 February 2015

UK SMEs are missing out on opportunities as they remain oblivious to alternative finance and government schemes. This has been at the forefront of news since 2013. And now, with Lord Young declaring that government support has helped small businesses grow, it's time to look at but a few initiatives that helped inspired ideas or get businesses off the ground.

G John Surveys

Initiative: X-Forces

In July 2013, Lord Young called for a greater cross-collaboration to maximise the entrepreneurial potential within the Armed Forces community.

“So many leaving our forces have the skills and experience to make a great success in civilian life and at last, are being given the chance to show us what they can do,” he said. “I hope that, not only will they succeed, but that they will be an inspiration to those who follow them.”

Since its launch, the organisation has helped to launch 170 new entrepreneurs, and facilitated more than £1.5m in seed funding.

Gareth John is one such entrepreneur. He joined the Royal Engineers in 2008 “to gain trade skills”, but after five years in the Territorial Army and two tours in Afghanistan, “the redundancies within the Forces changed the way [he] felt about serving”.

“I wanted to try my hand at being my own boss, and be in control of my own journey,” John said. “After leaving the Forces in October 2014 I explored employment opportunities in the survey and construction industry. None of these accurately reflected the level of role I was qualified for through my training and experience in the military. This led me to consider self-employment.”

He explained that he found X-Forces through the Start Up Loans Company website. Upon being asked how the initiative helped him, he said: “They helped me put together my business plan, making sure that I had thoroughly researched my industry, and that it was the right time to start this business, economically and personally. 

“They have assigned me a business mentor and the funding I accessed through X-Forces has allowed me to transfer smoothly from the army into running my own company. The loan helped me buy the equipment I need, fund the various insurances and establish a website and reputable brand identity to give my business the foundation I needed.”

Read more about X-Forces:

Proper 4 Group

Initiative: Start Up Loan

Believe it or not, the two co-founders met in London’s Brixton prison after committing fraud.

“While there we led on a project, reporting directly to the governor, to get serving prisoners in to work while still serving their sentences, where they were able to leave the prison on daily release,” said Michael Corrigan. 

“Over 200 men found work, and many developed careers as a result. This is what led to the formation of Prosper 4: being able to implement employment services for offenders and ex-offenders in the real world.”

But to get their company off the ground, they applied for a start up loan.

Prosper 4 attracted a £25,000 government start up loan and £35,000 in private seed capital. Not only that, the company has won the support of Lord Young and has the backing of X-Forces, which helps by providing business loans and mentoring.

The company now provides a scheme of their own. 

“From business plans to insurance, and banking to book-keeping, and applying for business Start Up loans, our programme is unique,” said Corrigan. “With quite modest skills, that we had always taken for granted, we can offer real help and make a lasting impact on ex-offenders futures, their families and ultimately society.” 

They are far from the only ones to have gained success off the back of the scheme. 

According to the Start Up Loan Company, more than 32,000 new jobs have been generated as a result of the scheme since its initial launch in 2012. And on 19 January, the 25,000th business loan was approved, taking the total amount lent to new firms to nearly £130m.

Read more about Start Up Loans scheme:

Bits & Bobs

Initiative: Fiver Challenge

The Fiver Challenge, which ran for the first time during June 2014, provides children with £5 and challenges them to see what they can turn it in to in a month. Prizes are awarded in both the 5-8 and 9-11 age groups for ‘most profit’, ‘most inspiring individual’ and ‘best community engagement’.

Fiver manager Holly Bateson explained that this year the Grasby All Saints CE Primary students showed how creative students can truly be, and that the seeds of entrepreneurship can start at a young age.

The primary school students, who won the best community engagement prize, “ began their task, Bits & Bobs, by doing their own market research. By positioning themselves at the school gate for a week, they were able to offer samples and taster sessions of their merchandise to a wide range of customers.

“With sales to a range of people within the local community, Buts & Bobs made a total income of £83.32 and a profit of £63.31. They donated 25 per cent of their profits to charity and used the rest of the money to organise a disco to raise funds for their next project.”

This has helped introduce young people to the world of enterprise and helps them build important employability skills which they can continue to develop in later life.

Read more about the fiver challenge:

Allied Ventura

Initiative: Growth voucher

The Growth Vouchers scheme offers advice and guidance to businesses taking part and subsidies of up to £2,000 towards the cost of that advice to successful applicants. The programme will then monitor business performance over the coming years in order to assess the impact that advice has had. Allied Ventura was one such company.

“Over a number of months, I had become increasingly aware that our online presence was not leading to new clients – and that we did not properly understand the opportunities to use our website and search engines to drive our business,” said director David Whitehead. “I applied for a Growth Voucher and selected Ascensor Ltd from the online marketplace as they are specialists in growing businesses online.

“Ascensor helped us to understand the onsite expectations of the search engines, which meant an analysis of website page structures, how to create new website pages that meet good quality standards and how to safely make website changes without risking losing any authority within the rankings. They also provided training in how to analyse a website’s external footprint, build up a back-link profile and disassociate the website from any link toxicity. Ascensor then worked on strategy development for future content production, both on and offsite to ensure the website remains healthy, regardless of future algorithm changes, through good quality, natural SEO.

“We will be recommending Growth Vouchers to other businesses in the future. The internet presents a huge opportunity for businesses to grow and when used properly can have a huge effect on their success. This means it is important for businesses to have an understanding of the online world. Even in the UK today many businesses don’t have a grasp of their online potential and people still refer to some practices as a ‘dark art’. 

“This is not the case – digital marketing is not only very effective but is also very measurable. It is important that businesses take advice to ensure that if they pay for services they understand what they are getting and when they have received a service they can properly evaluate it.”

Read more about Growth Vouchers:

Austin Hayes

Initiative: Government contract

In 2010, Austin Hayes secured a ten year partnering agreement with Defence Equipment and Supplies. Established in 1953, Austin Hayes has developed an unrivalled knowledge of ammunition containers and associated parts, quickly becoming the UK’s leading refurbishment specialist and has evolved techniques enabling larger proportions of used ammunition packaging to either be recycled or refurbished year on year.

The deal struck with Ministry of Defence (MOD) included “five years firm and options to extend for up to a further five years based on contract performance,” said MD Nik Vjestica. “By use of innovative techniques, we have developed to become a key supplier, demonstrating skills that are difficult to source worldwide, and providing significant environmental benefits.

“We also dedicated to driving down costs, both as a company and for the MOD as our main customer, and are constantly working to understand their requirements. As a result, the contract is estimated to save the taxpayer £11m per year by avoiding the cost of buying new packaging, when compared to cost refurbished packaging to an equivalent standard.”

Essentially, Vjestica said that working with the government itself helped them to grow.

“Working with the MOD has provided our company with a robust platform to plan
for the future,” he said. “It has provided us with a clear pathway for strategic investment in new equipment and the training of staff. Through continuous improvement and innovation we have generated important contract benefits and cost savings.

“At the same time and pace, the company has strengthened overall capability
and is better prepared to meet any new challenges ahead.The MOD business has also allowed us to diversify and expand our range of surface preparation and protective coating application services for UK engineering companies supplying steel fabrications, valves and equipment to oil and gas industries worldwide.”