Abstract
In the context of a topic that tends to generate more political heat than light, it is refreshing to read Richard Roberts’ clear and evidence-supported account of Finance for Small and Entrepreneurial Businesses. The book is the latest addition to the Routledge Masters in Entrepreneurship series, published in association with the Institute for Small Business and Entrepreneurship, targeted at postgraduate students. Certainly, it is a text that will help students to understand the major issues regarding finance for small enterprises, but it could also find audiences beyond its principal focus. Researchers seeking to appreciate the landscape of business funding in the United Kingdom especially will find it a helpful and detailed primer. Policy-makers and their advisers would benefit from recognising the varied needs of heterogeneous businesses grouped on the basis of their size. Perhaps unusually for a textbook, business owners are also likely to benefit from practical insights, derived from Roberts’ background in the banking industry as he offers details on how lending decisions are made and how applicants might present a strong case for accessing funds.
The book incorporates a lot of information into its 130 pages. The introductory chapter on Defining small and entrepreneurial business finance helps make the text accessible for all readers. The remainder of Part 1 is taken up looking at difficulties associated with financing small and entrepreneurial businesses and the kinds of external finance products used by such firms. Part 2 of the text examines different kinds of financial products that small and entrepreneurial firms might access, from structured debt through to equity. The third and final part of the book helps to set the different finance options in a broader operational context and also offers some thoughts on Current and future trends in finance for small and entrepreneurial businesses in the final chapter. The success of this book lies in three key features: the clarity of presentation, a balanced consideration of particular and more general considerations around financing and the provision of real case studies.
First, the book is written very clearly and provides detailed information on the kinds of financing required by firms depending on their needs. Roberts provides clearly reasoned discussion of the ways that businesses operating in different environments or with contrasting plans for growth may have varying demands for finance. The balanced tone of Roberts’ discussion is such that students will benefit by appreciating how the broad assertions about a funding crisis facing small firms, favoured by some contributors to the public debate, are unhelpful. Roberts is careful to acknowledge how certain types of business and enterprises in certain periods of development can encounter challenges while also setting out possible routes to overcome funding problems.
A second major strength of the book is the balance between discussing particular cases and providing an overview perspective. While the topic-focused chapters that form the majority of the text are helpful in setting out how funding issues can vary from firm to firm, the penultimate chapter The use of external finance over time: escalators and rollercoasters offers a more general overview perspective. Through the illustrative ‘funding rollercoaster’, Roberts explains how sources of internal and external finance become more or less relevant over time. The discussion incorporates issues of pre-finance right through to closure while explicitly sidestepping the trap of implying small businesses necessarily move from one state to another along some pre-determined, linear path. Nuance is added to this discussion by acknowledging the wider environmental influences that have a bearing on business plans and performance. Considerations such as the broader trading environment and the personal choices of business owners are highlighted as important issues to consider when trying to understand the finance position of a given enterprise.
The final main strength of this book is the case studies located in the ‘Appendix’. These cases are drawn from Roberts’ vast experience in this field, although they are anonymised. The cases are described with some analysis subsequently to provide commentary on the scenario presented and to set the case within some broader context. As such these cases will help readers to understand in practice the issues raised in the book. Moreover, they have the potential to be used as the basis for in-class discussion or seminar case studies.
In summary, Richard Roberts’ Finance for small and entrepreneurial business will be welcomed especially by students of this topic area while a wider range of readers will also find plenty to engage them. Clearly written with key concepts explained, this book strikes an effective balance between important details and an appreciation of their wider context.