Interview: Charles Cracknell, founder of the John Cracknell Youth Enterprise Bank » SMEInsider

Interview: Charles Cracknell, founder of the John Cracknell Youth Enterprise Bank

During the European Commission’s SME Assembly in Luxembourg, SME Insider spoke with Charles Cracknell, founder of the John Cracknell Youth Enterprise Bank (YEB), a Humber-based business fund that has supported over 350 local people with their enterprising ideas. We discussed funding for young people, how Cameron’s devolution plans could affect local firms and why he hates the word ‘entrepreneur’.

 

Continuing to help British businesses

Charles Cracknell has a long and successful history supporting British enterprises, particularly in the Humber region.

A former entrepreneur himself, Charles currently serves as chief executive of the Humber’s Careers Service, as well as being the youth enterprise manager of Hull City Council.

His job within the city council enables him to work with people aged between 6 and 24, helping them learn about starting their own business. But what Charles is most proud of is the John Cracknell Youth Enterprise Bank.

Founded in 2004, YEB supports the development of entrepreneurial culture within the city of Hull. Charles attended the European Commission’s SME Assembly in Luxembourg, where the YEB was recognised by the European Commission during its European Enterprise Promotion Awards, finishing Runner Up in the ‘Promoting the Entrepreneurial Spirit’ category.

Before the awards show, I spoke to Charles about his relationship with small businesses, starting with a explanation of what the YEB is all about.

‘‘Basically it’s set up with support from the local business community and it enables us to give grants to young people aged 13-21 to develop their enterprising idea, as well as gaining access to a mentor,’’ explained Cracknell.

‘‘That’s the short version of what we do, but the next thing we do is help promote these small businesses with other networks in Hull, and we also help young people gain a solid entrepreneurial education so they have the best opportunity to succeed in business.’’

Business support networks are extremely common in the UK, but before meeting with Charles, I had never heard of one specifically targeting businesses in Hull, so I asked why the Humber region was so appealing to him.

‘‘The bank was set up in memory of my father who left a sum of money in his will 12 years ago, and we’ve been very passionate about supporting young people in the Humber region.’’

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Educating the next generation of business owners

The YEB doesn’t just support teenagers who are curious about starting their own business; it has been known to encourage and educate children as young as five years old. That led me to wonder – at what age is appropriate for someone to become an entrepreneur?

‘‘First of all I don’t like the term entrepreneur, but that’s a whole other thing,’’ said Cracknell. As far as I’m concerned, you can become an entrepreneur as soon as you learn to think, as soon as you start to do things.’’

‘‘If youngsters harbour a passion to turn ‘nought into something’, then they should be encouraged to go further. We have been working with some people aged just four in primary schools. We are helping them understand some key enterprising skills, including communication and financial literacy.’’

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I wasn’t going to let Charles get away with his disliking of the term entrepreneur, so I immediately asked why he harbours bad feelings towards the (almost) universally accepted term.

‘‘I think that people involved within the business support industry feel the need to crowbar certain buzzwords into their vocabulary,’’ he explained. ‘‘So they found the word ‘SME’ and the term ‘entrepreneur’.’’

‘‘But for some who are actual entrepreneurs/SME owners, they don’t actually understand these terms, and what they also don’t understand is that the correct term to use is ‘enterprising.’ That’s why we do a lot of work with young people in schools to provide them with the correct definitions of working in business.’’

We quickly turned our attention towards the education system and whether the government is doing a good enough job to inspire the next generation of small business owners.

‘‘I think it’s always underestimated as to what’s going on in schools. We’re very proud to be working with the Young Chamber on a new investing model, whereby new businesses will get accredited and gain proper support.’’

‘‘It’s very easy to say ‘more needs to be done in schools’, but teachers have been enterprising every day. If you have to control a class of 30 kids; trust me, you have to be enterprising.’’

 

Financial support

The YEB doesn’t just give verbal and educational support to young business owners; it puts its money where its mouth is by rewarding new SME owners with up to £1,000 investment. I wondered whether a grand was enough to make a significant different to these companies.

‘‘When I started this fund we set up a consultation process and it was the young people of Hull that set the figure of £1,000 investment. They said that £1,000 enables them to be taken seriously for once, which is why we also use the term ‘Bank’ as we’re not legally a real bank.’’

‘‘However because we’re not constrained by rules and regulations, we can change that amount and we have in the past, giving £2,000 to some businesses, and handing out as little as £150.’’

‘‘Just giving a small amount of money to young companies can give them valuable experience for the future, when they approach a bank in regards to a sizeable business loan.’’

The YEB doesn’t just hand out money; it also receives grants in order to continue with its good work. In 2011 the support group received £20,000 from local communications provider KC, a firm that is synonymous with Hull City’s football stadium. Between 2011 and 2014, the YEB received £60,000 from KC communications.

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London Vs the UK

Hull is beginning to make a name for itself as a city that supports a range of businesses, with Cracknell revealing that he recently gave money to a 19-year-old chocolatier, but London certainly remains the UK’s ‘startup city’.

A report from Inform Direct recently revealed that the capital is now home to over one million businesses, so I asked Charles whether business owners need to operate in London in order to become successful.

‘‘I think businesses can flourish wherever they are,’’ replied Cracknell. ‘‘I’ve always said that Hull is no different to London, Glasgow, Gloucester, Oxford or the Isle of Wight. What determines a business success is partly down to the support it receives.’’

‘‘Also, you can create business support links with other parts of the UK. Ironically we’re partnering up with the London Youth Support Trust and they are about to launch a business incubator in association with us, so it is possible to bring organisations together from different parts of the country.’’

 

Overdraft charges

Not only is he capital home to the most businesses, research suggests that banks favour London over regional SMEs.

According to business finance group Funding Options, small northern businesses are suffering twice as many overdraft cuts as London firms, with 55 per cent of northern SMEs seeing their overdrafts cut or entirely withdrawn over the past two years. Cracknell believes that banks need to act quickly to remedy this problem.

‘‘It just doesn’t make sense that some businesses, regardless of where they are based, find themselves on the brink of foreclosure because their overdraft charges have been reduced. It’s absolutely stupid.’’

‘‘We need a more flexible interest rate policy within different parts of the country, and if it means having lower rates in London,then so be it because it will help support young entrepreneurs in the capital who are struggling with the price of rent.’’

 

Devolution of powers

One of the biggest talking points within the SME Community is the chancellor’s Autumn Statement and Spending Review, which could have a major impact upon small, young businesses.

The devolution of powers  from Westminster to UK cities is certain to be on the agenda, so I asked Charles whether he would like to see Hull more involved in crucial decision making processes for local businesses.

‘‘We’ve contributed to the Northern Powerhouse agenda and the devolution agenda and from our point of view these boundaries administered from Westminster are irreverent to us, but if push comes to shove then we would like to see devolution to Yorkshire as opposed to Hull, with Yorkshire electing a major that would be supported by councillors and the business community.’’

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With no plans to devolve powers to Yorkshire as of yet, people can only speculate as to who would be a potential major of Yorkshire, but Cracknell has thrown Kingston Upon Hull West MP Alan Johnson’s hat into the ring.

‘‘We’re very lucky that one of our patrons is Alan Johnson, so having him as an elected major would be great, but we have a fantastic leader in Wakefield in the form of Peter Box, who has got a real commitment to young people, apprenticeships and enterprise.’’

‘‘At the end of the day I don’t believe it matters about who’s in charge, what matters is getting those structures right, and if you can put devolution plans into place, then SMEs will benefit, especially if they are properly educated about the devolution plans.’’