When Vince Cable met a group of Yorkshire small business owners last Friday, he appeared braced for more complaints about red tape and miserly banks.
Instead, he left with an unappetising sounding “beer cake” – the result of a collaboration between two of the companies – and, perhaps more surprisingly, a warmer view of Goldman Sachs, reports The Telegraph.
The Business Secretary had travelled to Leeds to talk to entrepreneurs who have graduated from 10,000 Small Businesses, a little known free management training scheme run by the investment bank’s charitable arm.
Despite the name, just 400 companies have been through the programme in the UK, but Goldman Sachs claims some impressive results: on average, turnover has gone up 70pc, job creation by 60pc and profitability by 50pc for firms that complete it.
While that’s probably partly down to the fact that Goldman Sachs is picky about who joins the initiative – most are established and growing anyway – the companies appear impressed with the results.
The scheme is delivered by local business schools over 12 sessions lasting a combined 100 hours.
As well as meeting other business owners, which has led to collaborations like the beer cake (it tastes better than it sounds), the programme can provide some surprisingly rudimentary lessons to apparently seasoned entrepreneurs.
Viv Parry, founder of bakery business Exquisite Handmade Cakes – one half of the beer cake project – says: “As a chartered accountant, one of the scariest things for me about this was realising that some very clever people have little understanding of basic finance and accounts.
“I could see people with fantastic business ideas saying, ‘the figure on the left, what does that mean?’ Banks are getting a battering but a lot of companies aren’t presenting their case in the right way.”
That was the surprising response Mr Cable got when he asked the companies if they had problems accessing capital. Ms Parry added: “Companies can be successful almost accidentally – it’s when you want to get to the next level you need to put the tools in place.”
The Government is keen to talk up anything that can help improve the management quality of small businesses and close a productivity and exports gap with their German counterparts.
A similar Government backed scheme, GrowthAccelerator, which is run by Grant Thornton, is working with 1,500 mid-sized companies.
Michelle Pinggera, of Goldman Sachs, says: “People are often in business because they’re experts in a field, not necessarily experts in marketing, cash flow and people management. It’s incredible how quickly the companies can fast forward their growth by finding the things they need help with.”
Chris Ives, founder of craft beer business Ilkley Brewery, says the process gave him the confidence to approach equity investors. “They were impressed that we’d been mentored by Goldman Sachs. It has made a big difference to how we presented ourselves to investors and banks.”
Bobby Patel, founder of Indian restaurant Prashad, said the experience has improved his procurement skills, while Gav Winter, owner of IT business The Test People adds that he’s established a sales partnership with one of the participants and has outsourced his HR operation to another.
Mr Ives says simply spending time with other small businesses can be as benificial as the management training.
“Part of the problem for any small business is that it’s quite a lonely place at times. Everybody has been through this says the same thing – you need time out of the workplace. To be able to share that with businesses in a similar position, some bigger, some smaller, is hugely benficial.”
Mr Cable, who famously described the City as a “cesspit”, joked that he’d be “more polite in future” about the controversial investment bank as a result of its efforts.
It will certainly have achieved something if it can get more business owners talking like Ms Parry: “We never spoke about the recession during the course of the programme. Everything was about driving companies forward.”
