Funding Advice – Interview with Richard Bearman, MD of Start Up Loans UK

As part of The Startup Magazine Interview Series, we interviewed Mr. Richard Bearman. Richard is the Managing Director of the British Business Bank supported Start Up Loans Company, a programme providing loans and mentoring support to aspiring business owners.

Mr. Bearman, with over two decades in the industry, previously held the position of Head of Business for HSBC UK, where he was responsible for setting the strategic direction and growing HSBC’s UK small business customer base.

Richard helps us today with his insights into:

• The challenges of setting up a new business
• Tips for aspiring business owners
• How Start Up Loans supports the small business community in the UK
• The crucial role that small businesses play in the UK

Here are his insights:

TSM: You’ve dedicated much of your professional life to helping start-ups launch and thrive as small businesses. What do you find so interesting about start-ups?

Every start up has its own story and that’s why I find the sector so interesting. Behind every start-up is a great idea and I love hearing about the brilliant ideas that helped people launch their business. Take the woman from Brighton who was inspired to create her own brand of maternity fitness wear after discovering that her pregnant sister was too embarrassed to exercise, or the ex-serviceman who started a broadband business after discovering he had stronger Wi-Fi connection in The Falklands than in the UK.

It’s not easy setting up a business. Many people give up at the first hurdle. Small business owners are exceptional in their ambition, passion and drive, and I feel fortunate that through my work I get to meet so many of these inspirational individuals.

TSM: In what industries do you see startups having the most disruptive impact?

If there is one thing that I have learnt during my time working with start-ups, and at Start Up Loans, in particular, it is that disruption in any sector is possible with the right idea. We have seen disruption across the board and we’re delighted that we’ve supported so many exciting businesses across the UK, from a man in the Midlands who set up Birmingham’s first specialised table-service gin bar, which was recently named Best Gin Bar in the World, to a former marine biologist from North Shields who created an online business selling products made from seaweed.

TSM: In 10 words or less, describe the Start Up Loans programme? Then explain a bit more how the programme supports the small business community in the UK?

We provide funding and mentoring to aspiring business owners.

Through a network of Delivery Partner organisations, the Start Up Loans programme provides pre-loan support to help applicants to develop a business plan, a fixed-interest loan of up to £25,000 to start or develop their business, and mentoring to support new loan recipients throughout the early stages of their business journey.

The programme – which is part of the British Business Bank – exists to support and empower small business owners, whatever their background. Since 2012, it has delivered more than 67,000 loans to business owners across the UK amounting to more than £534 million. Of those who have received a Start Up Loan, almost four in 10 are women, more than one in 5 come from black, Asian and minority ethnic communities (BAME), and over three in ten were unemployed when they applied for the loan.

But it is not just about funding. We know that getting the right advice about your business can make the difference between success and failure – which is why Start Up Loans places great emphasis on mentoring and support. Through our network of delivery partners, Start Up Loans provides pre-application support with business plans and cash-flow forecasts to help you get into the best possible position to succeed. Loan recipients also receive12-months free mentoring support. When we researched the impact of mentoring on our loan recipients earlier this year, we found a positive connection between a business owner’s participation in mentoring and their confidence, optimism and business survival levels.

TSM: What role does small business formation play in the UK?

Smaller businesses are critical to the health of the UK economy, and over a thousand are formed every day. The UK’s 5.7 million smaller businesses employ 16.1 million people. That is 60% of all private-sector employment in the UK.

TSM: Getting funding is usually a huge challenge for startups, what are a couple of tips to help founders with their loan applications/pitches?

Raising or sourcing affordable finance is one of the main challenges that aspiring business owners face. Recent research by British Business Bank’s 2019 Small Business Finance survey shows that a third of SMEs went directly to their main bank when they needed finance, even though this route may not always be the most suitable for them or their business.

That is why we recommend doing your research. There are a lot of options out there and the most traditional or well-known may not be the best option for you.

There are many sources of alternative funding specifically designed for people wanting to start their own business.

In terms of tips and advice, putting together a clear and sensible business plan from the outset will help you to get on the front foot. This plan should include business objectives, a strategy for reaching these objectives, potential roadblocks and market opportunities. If you are unsure how to structure your plan, take a look at the free to download templates of a business plan and cash flow forecast on the Start Up Loans website.

TSM: Can you cite a particular success story that you’ve seen that most inspires you?

It’s really difficult to single out one business because I’ve seen so many fantastic businesses, but PJ Farr, 31, the founder of UK Connect, is a great example of an inspirational business that has been supported by our programme that has since gone from strength to strength.

A former soldier who struggled at school, he launched UK Connect in 2013 after returning from the Falklands and discovering that he got better mobile phone reception back there than back home in Guildford.

Using the curiosity and discipline that he had developed as a soldier, he decided to solve the problem by taking out an £18,000 Start Up Loan and setting up his own national broadband and communications service for the construction industry.

Six years later, the business has an annual turnover in the millions and a client list which includes some of the biggest names in construction.

TSM: What are some of the characteristics of entrepreneurs that most help them to become successful?

 

Perseverance, determination and a willingness to learn from others are key. Starting and growing your own business is an exciting prospect. It allows you to follow your passion, become your own boss and take ownership of your career. But the highs of escaping the nine to five come with significant challenges.

Successful entrepreneurs are those who don’t give up at the first hurdle; who keep going during the tough times, and turn to others for help when they need it. This is why Start Up Loans places such great emphasis on mentoring and support – they have a genuine impact on business survival levels.

TSM: In entrepreneurship, failure is usually one of our greatest teachers. What are some founder characteristics or business strategies that you’ve seen lead to failure?

Speed is often seen as a key priority when starting a business and, in some instances, it’s true that decisions have to be made quickly and decisively. However, it often becomes counter-productive people do things in a hurry, without careful planning or thought.

When launching a business, it’s worth spending some time putting together a checklist listing all the activities that you must do to get your business off the ground. This will ensure that nothing is overlooked.

TSM: As you have a history of building early-stage companies, what is the most important thing you tell startup founders?

First and foremost, it’s important to have a clear and sensible business plan. This may sound obvious, but you’d be surprised how often business plans are overlooked, as businesses rush ahead to get their idea off the ground. But it is also critical to have and display a passion for the business. For example, a funder wants to know how they are going to be repaid but also wants to be engaged with the idea of the concept or the individuals involved.

TSM: Just so we can learn a bit about you, what is one interesting fact about you that people may not know?

I can play the Banjo and the Bassoon…..neither very well!

TSM: You are certainly performing well in supporting the startup ecosystem. Thank you for your insights.

For more information about Start Up Loans, please visit their website.