Mer Standing up for small business

Rekha Mehr, founder of Pistachio Rose, an anglo-indian food start-up which supplies Fortnum & Mason
Rekha Mehr, founder of Pistachio Rose, an anglo-indian food start-up which supplies Fortnum & Mason

Starting a business is usually an all-consuming affair. The received wisdom says that evenings, weekends, partners and children must all be sacrificed in the early days if a start-up is going to have a fighting chance of survival.

So why is Rekha Mehr, whose Anglo-Indian food business is barely a year old, about to go part-time?
Rekha is daughter of Arshibhai M Karavadra from Bracknell.
Mehr’s counter-intuitive logic says that, far from representing a lack of ambition, moving to four days a week is vital to allow her company, Pistachio Rose, to grow beyond her Fulham kitchen in south-west London.
“Last year, I tried to spread myself everywhere and was trying to do everything at once. This year, I need to work smarter. Giving up a day means I’m finally going to get out of the kitchen.”
Since August, Pistachio Rose has been supplying luxury retailer Fortnum & Mason with ginger shortbread, mini chai madeleines, sweet naans and dark and white chocolate tarts. However, Mehr says she has had to turn away orders from elsewhere because one pair of hands just isn’t enough to fulfil them.
“This is about forcing myself to have good discipline. I’m not allowing myself to move forward until I fix the problem,” she said.
The 31-year-old is now in talks with a production facility to transform her venture from cottage industry into growing business. Her plan will also mean taking what many start-ups regard as a daunting step: hiring a first employee.
“The reason I haven’t done it yet is because of the anxiety over the responsibility of it. Also, you tot up the time it would take to train someone and doing it all yourself looks quicker in the short term. I’ve fallen foul of that attitude and have limited myself. Now I need to let go in order to grow.”
This kind of hands-on experience of what running a start-up is really like should stand Mehr in good stead for what she’ll be doing with her free day: advising Vince Cable’s Business Department.
Mehr is one of two “entrepreneurs in residence” who were appointed last week to advise the Government on policies that affect small and medium-sized companies. She insists the role will have been more than Government gimmickry if she can help improve the take-up of some potentially useful but little-known initiatives designed to help owner-managers.
When the former Waitrose and Amazon buyer looked around for help and advice ahead of launching Pistachio Rose early last year, she turned to the (now defunct) Business Link website.
“It was arduous; an archive of information that wasn’t easy to navigate and where it wasn’t clear what’s available, and that a lot of it is free of charge.”
In preparing for her Whitehall role – which pays £10,000 a year – Mehr says she was “surprised” by the quality of “tools” and advice that’s available.
“People are understandably sceptical, but I believe that if what is out there was communicated more clearly, there would be a much bigger uptake.
“It’s smarter ways of getting the message out for people who don’t know what’s available, but also encouragement for those who are reluctant to use [those schemes]. Those
are the conversations I want to have now.”
Mehr, who was inspired to start her cakes and sweets business when sampling street food during a trip to India, cites the Government’s ‘MentorSME’ initiative as an example. The free online service acts as a matchmaker between small businesses and experienced advisers.
“I hadn’t heard of it but now I have, I’d be a fool not to use it. What’s needed is clarification of the services and how people should access them. If I can help get information to the people who need it, and hopefully inform policy, this will have been worthwhile,” she says.
Lawrence Tomlinson, the second of the entrepreneurs advising the Government, has given himself an even more ambitious remit: to help small companies access bank finance.
The founder of the £100m LNT Group, which has interests in construction, software, chemicals, car manufacturing and care homes, Tomlinson says he wants to be a “direct line for small companies to go through to let the Government know what’s really going on in the economy”.
For him, that reality is “businesses being starved of credit”. The Leeds-based entrepreneur, who bought a single care home from his parents in 1988 and went on to sell the business for £180m, wants to put pressure on the Government to take a tougher line with lenders.
“There are opportunities to make the nationalised banks lend, rather than simply asking – it’s the biggest topic of concern for businesses.
“The banks have had the carrot since 2008, they’ve been found guilty of all sorts in the meantime, from fixing Libor to mis-selling; at what point do you force them to lend?”
For Tomlinson, the biggest problem is that banks have disempowered local relationship managers in favour of centralised credit committees – so-called “computer says no” banking.
He believes that power needs to be given back to “local people who know and understand local businesses”.
While banks publicly dismiss this argument, blaming parlous lending figures on a lack of demand, they will privately admit there’s some truth in the accusation.
Lord Green, the former chairman of HSBC and now the Government’s trade minister, has said as much. “Over time banks [lost] strong talent in business banking. The central risk management function responds by disempowering them and you get into this downward spiral [of poor lending decisions],” he told MPs earlier this year.
Tomlinson says the ideal solution would be to help lenders develop services that occupy a “halfway house” between “Bank of Dave” – a tiny community bank started by a Burnley entrepreneur which featured in a Channel 4 television programme – and nationalised giant, the Royal Bank of Scotland.
In reality, one man is unlikely to be able to do much to ease such an intractable problem – but Tomlinson will at least represent another voice from within at the Business Department, advocating a tougher line on banks and measures to boost competition.
“I can only reflect what businesses tell me and my own experiences and I’m going to voice those concerns,” he said. “Something has got to be done.”