Anna Dove reports on Royal Bank of Scotland’s involvement with start-ups and why entrepreneurialism is so important to the economy
THIS month, the Royal Bank of Scotland and NatWest announced their support for thousands of entrepreneurs and high-growth businesses with a multi-million pound network of 13 business accelerator hubs.
This new focus on enterprise marks a step-change in the way RBS supports entrepreneurs.
Economic development is a key element for growth in any country but starting a business from scratch is no easy feat.
Start-ups are more important to the UK economy than ever before. Between 2012 and 2013, fast-growing small firms created 68 per cent of all new jobs in the country, despite making up just 1 per cent of the total business population.
Start-ups are a key component in the engine of growth fuelling a country’s future prosperity, so giving new and growing businesses the best possible start allows them to build themselves up and see in their first and second birthdays.
“First and foremost, supporting entrepreneurs is definitely what we should be doing as a bank,” says Gordon Merrylees, head of entrepreneurship at RBS and NatWest.
“We have got a duty to support start-up businesses. Entrepreneurs are the lifeblood of the UK economy. Starting your own business is more popular than ever and there are more businesses than ever registered with zero employees.
“Supporting entrepreneurs really ticks the box for our values and we want to be the go-to bank for entrepreneurs.”
As the biggest supporter of SMEs in the UK, RBS has worked in partnership with Entrepreneurial Spark for the past two years.
Entrepreneurial Spark is the world’s largest free business accelerator for early stage and growing ventures.
It currently runs “hatcheries” in regional cities across the UK where fledgling businesses, or “chiclets” as they are known, are given office space, advice and mentoring to help their companies grow before they fly out into the world on completion of a six to 18 month development programme.
The majority of these hubs operate from Royal Bank of Scotland or NatWest premises. Spring 2016 will see the Edinburgh Entrepreneurial Spark hatchery move inside RBS’s headquarters at Gogarburn, where it will be part of an enterprise hub with the EDGE Fund, funding entrepreneurial activity in Scotland, Entrepreneurial Scotland, the Prince’s Trust and Business Gateway among others.
“We have a focus on entrepreneurs in general,” says Merrylees. “For example, we have 250 accredited Women In Business specialists in the UK and no other bank has supported the Prince’s Trust for as long as we have. We have supported them since 1987.
“We have also done a lot of work in London with the Disabled Entrepreneurs Movement.”
With 80 per cent of start up companies supported by RBS and Entrepreneurial Spark still trading today, it’s no wonder new hubs in Belfast, Cardiff and Manchester are being added to the portfolio.
“The entrepreneurs get support from a pool of over 50 business mentors, many of whom we bring to the table,” explains Merrylees, whose role is to lead RBS’s entrepreneurial strategy which includes Entrepreneurial Spark.
“When we see what impact Entrepreneurial Spark has had on young Scottish businesses, including impressive survival rates, we know it will be worth it.”
There is no catch for businesses. The scheme is in place purely to help entrepreneurs run better businesses.
Benefits of being part of the Entrepreneurial Spark and RBS scheme include a collaborative office environment suitable for building teams, free IT and wifi, and access to business enablement and support from mentors.
There are also opportunities to network during compulsory events and workshops.
At the end of each programme, the hubs host “graduation” events, which are a chance for entrepreneurs, investors and business advisers to come together for mentoring and networking sessions.
At this stage, graduating businesses can pitch to potential investors and RBS announced last September that awards of £50,000 are being launched across the country, offering cash injections to businesses where they need it most.
For budding businesspeople looking for a head start, the first step on to the start-up ladder is filling out an online application and quiz on the Entrepreneurial Spark website.
If successful at this stage, entrepreneurs will then be invited to an interview.
“When we open these new accelerators, we will support 7,000 entrepreneurs in the next five years and we will also see up to 10,000 employees get the chance to go through our Entrepreneurial Development Academy,” says Merrylees. “We have, just this month, launched the academy where we want our staff to be more entrepreneurially minded.
“Our work with entrepreneurs helps us serve our customers well. We learn a lot from them and that means we can offer a better service to our customer base.”
Case study 1
LOBSTER Pod is an innovative, patent-pending live shellfish storage and transportation system. It is also a relatively new player on the seafood scene, based in Dalgety Bay and set up just last year by Errin Todd and her marine biologist husband Dr Keith Todd.
Lobster Pod’s unique controlled atmosphere system has been scientifically proven to increase the survival rate of shellfish to over 99 per cent.
“My husband and I have been working alongside the fishing industry inventing and manufacturing technology with a focus on improving the quality of seafood and ensuring efficiency in the supply chain since 1998,” says Todd.
“We knew the biggest challenge currently for the industry was the high mortalities during transit of 15 per cent on average.
“With a worldwide market of lobster, crab, prawn, scallop and other shellfish species worth over $40 billion and growing, this valued the loss at over $6bn. We made it our mission to invent the solution.”
The couple started to work full-time on the concept when they began the Entrepreneurial Spark programme in February 2014. Lobster Pod started trading a year later.
“I applied to Entrepreneurial Spark when I saw it on Twitter after seeing a television documentary,” explains Todd.
“I had decided to dedicate 2014 to working full time to make my dream a success and Entrepreneurial Spark seems to be a good fit and the timing was right.
“I engaged fully with the Entrepreneurial Spark programme and learnt a lot from my enablers and mentors. Entrepreneurial Spark helped build my self confidence and I learnt to pitch, I validated my business and did extensive market research.
“I got financial and legal advice but, most importantly, I learnt to listen to my own gut instinct.”
Since the launch, the company has sold 17 Lobster Pods with customers including a celebrity chef and Billingsgate Fish Market in London.
Case study 2
WITH a background in horticulture, Mandy Bailey’s decision to start up a “grow your own” business seemed a natural one.
“Horticulture has always come quite naturally to me,” explains Bailey.
“Then I realised that growing your own wasn’t really the norm and most people found the entry point a bit of a challenge and that’s where the concept came from.”
Based in Edinburgh, Plant-n-Grow sells indoor and outdoor grow your own kits for fresh herbs, vegetables and edible flowers both online and wholesale.
Two years ago, Plant-n-Grow was just a concept in Bailey’s head and as launching a company alone can be challenging, ensuring you get the relevant advice and support can be the difference between watching your fledgling startup fly or flop.
“I saw an advert for Entrepreneurial Spark on social media and responded. Then I went along for the interview and entered the Edinburgh hatchery in October 2013,” says Bailey.
“Our programme started with a five-day boot camp in Glasgow and it was just amazing.
“They provide you with a huge support network. There’s legal, IT and financial advice as well as things like Business Gateway and Scottish Enterprise.
“We were also supported by a team of mentors who are specialists in their field. They are largely people who have had their own businesses and run their own businesses and are now giving back. We were really lucky to get on board with some fantastic mentors early doors.
“It’s a rollercoaster owning a small business and you can have lots of highs and lows in one day.”
Today, Bailey’s business is continuing to grow in the post-nest stage of Entrepreneurial Spark and she is busy mentoring other small businesses as they prepare to spread their wings.
“We have had a lot of interest from Europe, Canada and America, but at this stage we are just focusing on growing in the UK,” says Bailey.
Case study 3
ENTREPRENEUR Hayley Brown was co-running an Edinburgh modelling agency when she thought up the business model for GlamCandy make-up school.
“We found that a lot of the models were interested in the beauty and make-up side of the industry they were involved in,” says Brown.
“We saw an opportunity to start doing demo classes to show them make-up application techniques and with my sister-in-law being a make-up artist, she was able to teach the classes.”
Brown says she became involved in Entrepreneurial Spark because “the universe wanted it to happen”.
After a series of chance introductions to Entrepreneurial Spark mentors, she decided it was time to get some business support.
“GlamCandy joined Entrepreneurial Spark in February 2014 and we have been through two terms of six months in the ‘chiclet’ level,” says Brown. “We are currently halfway through our 12-month ‘nest’ level.
“GlamCandy is not only a private make up school, but a booking agency and we source successful graduates paid work on completion.
“We also have a number of product ranges including a ‘nice smelling’ fake tan.”
Since its foundation in Edinburgh, Brown has added five further GlamCandy locations including Aberdeen, Glasgow and Fife.
“We will be launching in an additional four cities; Manchester, Liverpool, Newcastle and Inverness, which are set to be trading by this autumn,” explains Brown.
“From working with RBS and Entrepreneurial Spark, GlamCandy has seen a 321 per cent increase in turnover.
“I would encourage SMEs throughout Scotland to speak to RBS and gain advice from them. The advantages of speaking to and learning from people who are in the know is second to none.”