Pity the public servant who stands up in front of a room and asks a bunch of business owners, executives or managers what they want from government.
While there will be plenty of comments about improved procurement, less red tape and reduced fees you can be sure there’ll be plenty of demands that the government ought to subsidise something – anything – that business does.
It’s notable how free enterprise, small government and low taxation loving business people will drop their copies of Atlas Shrugged and barge their way to the feeding trough and the slightest scent of taxpayer money wafting in their direction.
But is government money really good for a business? In many cases it isn’t.
You run a business, not work in a government department
“Who pays the piper, calls the tune.” The whole idea of running a business is that you are the boss, so why do you want to answer to a government department?
If you’re self employed or just opened a startup, one of the main reasons for doing so is because you decided you no longer want to work for the man. A government grant may well open up a whole new world of paperwork that leaves you wondering why you ever left the cubicle.
The dependency culture
One of the dangers of government funding is if you are successful, you’ll find yourself hooked on it. Quickly you become better at filling in funding applications than delivering products your customers want. The Aussie film industry is a good example of this.
Governments are behind the innovation curve
Public servants are not employed to take risks, this is a good thing as it’s our money they are handling.
Because governments are risk adverse they’ll only recognise an industry – or a problem – long after it has become established.
If you find you are on the government’s help list, it might be time to consider an exit from a troubled industry.
Do you really have a business?
Many new business owners expect the government should do something to assist them in their start up phase. This is a common complaint from under capitalised proprietors.
Given the massive subsidises given out to the banks and other big corporations since the start of the great recession, this attitude can almost be excused but we can already see how well that strategy works.
If you really need a subsidy to run your business, then it’s time to consider whether you should be in business at all.
This isn’t to say all government funding is bad; well thought out programs help viable businesses with things like export assistance, skills development and employing young or disabled workers. There are many of these although the process of identifying what a viable business is usually eliminates the newest and smallest enterprises.
What is notable with the successful government programs is they address a specific need, they don’t have onerous paperwork and they are no substitute for a healthy, living cashflow and profit.
Overall though, if you really want government money then take a job with the public service. It’s a lot easier than scrabbling for grants.
And sometimes those troughs can become very large indeed – witness the whole ‘registered training’ system that is churning out young managers and customer service professionals. It makes for great statistics!