Small firms can breathe life back into economy says 'dragon' Richard

Published on Monday 17 November 2008 21:01

SMALL businesses are the key to pulling the UK economy out of recession, a leading entrepreneur has told The Scotsman.

Doug Richard, who was one of the original "dragons" on BBC2's Dragons' Den television series, said the UK was "not teetering" on the edge of recession but was already in one.

The Californian entrepreneur – who made his fortune through software, selling his Micrografx company to Corel in 2000 – was one of the investors in the first two series of the TV programme.

Speaking to The Scotsman at a recent "School for Start-ups" event at Edinburgh University's school of informatics, Richard said he did not think there was an easy way out of the current financial crisis.

Richard, who is chairman of the Conservative Party's small business task force, said: "I don't think the UK government is doing anything wrong but I would question the policy of carrying on spending.

"It would be nice to see the central banks dropping interest rates precipitously but I don't think that will solve it either. I think we have half a decade of pain ahead of us as we work it out."

Richard, who is the chairman of business intelligence firm Library House, added: "Small businesses are always the key to getting out of a downturn – the economy is grown on the back of small businesses. If you want a growing economy then we're going to need small businesses.

"Businesses can start in a downturn – they don't have to start in an upturn.

"If the events of the last few weeks have taught us nothing else then it's that you can't rely on a job at a big company and so it's better to be the master of your own fortunes."

The aim of Richard's School for Start-ups is to help budding entrepreneurs work out if their idea is good before they sit down to write a business plan. He said: "The goal is to get them to be ruthless critics of their own ideas. Turn them into Dragons' Den types – internalise it or carry an inner 'dragon' with them."

He will be taking his day- long workshop to the Mitchell Library, in Glasgow, on 10 December and will be offering a similar event the following day on "entrepreneurial economics".

"All businesses require some form of capital but capital isn't necessarily what you get from a venture firm – it can be from a customer, it can be from a partner, it can be from a friend, it can be from anybody," Richard said.

"I think we over-estimate the capital question and underestimate all the other questions in business start-ups."