Small businesses getting a start in job-starved areas
"We're crying out for people." In a region of endemic unemployment, those are encouraging words from a managing director -- especially in rural areas like Swatragh, 42 miles from Belfast, where jobs are few. And they are music to the Local Enterprise Development Unit (LEDU), the government body that helps small businesses get going.Skip to next paragraph
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Tom McIlwaine, general manager of Northern Counties Co-operative Enterprises, means every word. His venture is a typical farmers' cooperative of 2,200 local shareholdders, with an atypical addition: a subsidiary, Carn Fasterners, which employs 30 people making wood screws.
When Mr. McIlwaine came 12 years ago, he found a country town of some 450 people in heavily Roman Catholic South Londonderry; sheep grazing on lawn-smooth hills between hedgerows; snug small houses of white pebbledash; and a dotting of centuries-old moss-covered masonry. He also found a cooperative started five years before by a local priest, supported by both Catholics and Protestants.
"I looked at lots of things that were associated with farming, such as the canning industry," said Mr. McIlwaine, who felt the co-op needed a firmer financial footing. "Somebody said to me one night, 'You wouldn't consider making wood screws?' I said, 'Why wood screws? Those are something you get free when you buy a pair of hinges.'"
But he soon discovered that one English firm, GKN, had a near-monopoly on the British market. He felt he could do the job more cheaply. So, with machinery from Switzerland, wire from British steel, and support from the Local Enterprise Development Unit, he plunged into the market, emerging in 1976 with an award for the best small company of the year and in 1979 with profits up 40 percent over the previous year.
Now, making 2,75 million screws a week, he has some 35 percent of the Ulster market, 12 to 15 percent in the Republic of Ireland, and about 3 percent in the United Kingdom. Not surprisingly, he plans to expand.
To LEDU's Ken Gilbert, Carn Fasteners is the kind of success story to dream about. The firm is thriving so much that the unit may be unwilling to fund its expansion, feeling it can do it on its own. The unit's tasks is to foster small businesses -- anything owner-managed with from one to 50 employees -- in areas of high unemployment where large industry would not be feasible.
Since its inception in 1971, says Mr. Gilbert, his operation has helped create more than 10,000 jobs. Last year it assisted in the creation of 1,300 of them, with a total funding (c) 4.6 million ($10.1 million) at an estimated cost of L4,179 (some $9,200) per job.
Assistance includes providing rent-free premises, helping to buy machinery, and providing management counseling and training. The development unit also awards loosely controlled "establishment grants" of up to (c) 2,500 ($5,500), when needed, to cover what Mr. Gilbert calls "unaccountable" problems during the first two years.
Not all applicants are considered. Adrian Stinson of LEDU notes that "we are in the risk business, but not the gambling business." Polite refusals have so far been given to the inventors of a bathtub with a door in the side, a humidifier to make Arab countries fertile, and a flying space platform for 10, 000 people.
But some successes have sprung up in the so-called "BUN units" -- an acronym for "business units in areas of need." Situated right on West Belfast's "peace line" in an area of urban blight and sectarian tension, these new buildings group a dozen windowless workshops of up to 300 square meters (360 square yards) around a secure central courtyard.
Paul sharma, whose firm of nine people, Paulson Knitwear, makes 15 dozen sweaters a day, bubbles with delight over the facilities. An Indian who came to Belfast by way of Manchester, he found in England that "all I knew was, my next door neighbor's name was Bob -- I didn't know what he did."
Both socially and commercially he is happier here. "Any day I'll take the bombs and bullets," he jokes, although in fact he has had to contend with neither.
His neighbors agree: Robinson & Mornan Bookbinders, McKenna's Ornamental Cooperworks (making fireplace hoods), GE Designs (making standby power units for microprocessors, necessary in rural areas where electricity supply is iffy), and printmaker David Scott's one-man operation are all new starts.
One 10-year-old company, Kestrel Upholsterers, shared a run-down old mill with other companies in the Legoniel area -- until several bombings drove their neighbors out. Now they are safe, happy, and prosperous, with 14 people turning over a (c) 100,000 ($220,000) profit in 1979. New machinery, a year's full relief from what is in any case a nominal rent ((c) 80, or $176, a week for 6, 000 square feet), and a recent two-day marketing seminar for manager Charlie Campbell have all been courtesy of LEDU.
John Carmichael, the development unit's officer for West Belfast, takes an avuncular pride in the two fully occupied BUN units and looks forward to others now in construction. Here in West Belfast, where the work force comes with equal ease from both sectarian housing areas, he screens new business proposals carefully. "We can't afford any failures," he says, adding that "this area is socially and politically dynamite."
So far, nobody is anticipating any explosions.