Start Up Your Startup: the Internet vs. Admin Nightmares
“Jobs and growth” has been the mantra of politicians across Europe since the start of the crisis. If, every time they said it, one job and a corresponding unit of growth had been created, Europe would be a glittering beacon of full employment and double-digit expansion. But it isn’t — the situation is still pretty dire. One way policymakers are trying to tackle this is to encourage everyone to find their inner entrepreneur, and set up a company.
“It will be small businesses and web startups that will create the ideas and jobs that we need for our economic growth,” wrote EU Digital Single Market chief Andrus Ansip on his blog. “No industry, no SME, no government can maximise its performance and competitiveness without going digital.”
Among his bright ideas: a new type of pan-European small tech company licence, which anyone could set up in under 24 hours, with unified requirements across all EU countries. There’s already a wealth of apps, websites and software out there which help make setting up a business infinitely simpler than in the pre-Internet era.
For a start, you need to have some customers, and to organize them. Carrie Sutton has been teaching yoga since October 2013 and moved to doing it as a business in spring. Her speciality is pre- and post-natal yoga, taught at home and in studios around Brussels. “I’ve just started using TimeTrade for scheduling private sessions,” she says. “Clients can see all of the possible times and choose the one that works best for them, while I can focus my time on creating lessons rather than administrative tasks”. She can stay Zen because everything is online: as well as setting times, she uses Google Forms, which is “really helpful for making online registration forms for my clients.”
In Coimbra, Portugal, Phillippa Bennett set up PMB Translations to make a business out of her translation skills. Now she’s specialized in translating medical texts from Portuguese to English with clinical precision, and her surgical assistant is the web. “I’m a fan of Freeagent, for accounting, you can set it up to any currency and I find it saves me a huge amount of time,” she says. She also uses Trello for project management.
The Internet and your smartphone can’t come up with your bright idea for a new business, but they can help with just about everything else. (This phenomenon explains why the McKinsey Global Institute found that 75% of the value created by the Internet accrues to “traditional industries”, not Internet companies.) Once you’ve started getting paid, there are numerous accountancy aids. One of the first to emerge was QuickBooks, which was initially greeted with scepticism by professional accountants. Users, however, loved it because they could get real-time information about their accounts without waiting for a formal month-end procedure, which was revolutionary. The cloud based service is now used by 1m small businesses and 100,000 accountants.
QuickBooks is doing well in the U.S. — and there are plenty of other products for small businesses such as Gorilla, Xero or Freeagent. These services allow businesses to combine online bookkeeping with a “real world” accountant — Sussex accountancy firm Carpenter Box has been going since the 1920s, for example. Also in the UK, there’s Sage, which manage finances, people, and supplies for 800,000 customers from startups to multinationals.
I’m sure you’ll all agree that the only subject sexier than accountancy is tax, so let’s go there. Ms. Bennett also uses a Portuguese app called Facturama, which “allows us to issue invoices and comply with all the Portuguese bureaucracy.” Paying tax is not much fun, so reducing the pain of the exercise by doing it online can only be a good thing. Look at the PwC survey on paying taxes (I told you this would be sexy) which concludes that “when asked how computer software could be improved to help with the tax compliance process a number of contributors argued for the introduction of online payment and filing systems.”
Online disruption in this area is also interesting because it shifts the fundamental role of the accountant. There’s no need to enter numbers into a spreadsheet if the client is doing that via software reading photos of the the restaurant receipt they uploaded from their phone. But the human touch is still absolutely necessary: an app will never have a nuanced understanding of who an entrepreneur is, what they want from their business, and how best to explain to them, over lunch, that they can’t buy a new handbag with company funds (look it was worth asking, OK?).
The professional accountant’s role is therefore moving from being primarily the quality controller of data entered by the client to that of using the client’s data to provide business advice — which requires a different, and higher level, set of skills. In fact, the cloud offers accountants the possibility of becoming much closer to their business clients, accessing data that will enable them to make their clients’ business successful. They can tell clients if they’re short of funds, or increased profitability brings additional tax consequences.
Then there’s the biggest disruptive element of the impact of the Internet on accounting – employment. Over the last 30 years fewer and fewer staff have been required to deal with the accounting function. The staff that remain are expected to possess new technical and analytical skills.
It’s far from unique: when I worked as a secretary in the early 2000s, my first job each morning was to print the boss’ emails off, before typing up his replies. After he retired, the new boss could do his own emails, and everyone could use Outlook to schedule meetings, and that job doesn’t exist anymore. But neither does the cost of hiring me to do it, which makes life a lot cheaper for startups.
The Eeyorish take on this “shadow work” — that every time I book a flight online I’m taking a travel agent’s job away — is nicely explained here. It’s not realistic to expect everyone who just lost their job in a factory making stuff to suddenly become a self-facilitating media node coding an “Uber for X” in a converted warehouse. Have a look at this video detailing the latest EU digital scoreboard: 18% of Europeans haven’t even used the Internet (pretty sure my old boss is still one of them).
But it’s also true that this same phenomenon creates new jobs. Were there any SEO specialists, real-time social data analysts or data journalists around a 120 years ago? No, but waving a flag in front of a moving automobile was a legit form of employment. Let’s come back to Carrie the yoga instructor — a career which has been around for roughly 5,000 years. There’s no way to predict which jobs will stick around and which won’t — but whatever your new business is going to do, the Internet will make starting it easier.