When Kuldip Wouhra stepped off the plane into a freezing autumn night at Heathrow airport he had £3.50 and one phone number in his pocket. Just 18 years old, he had no idea how he would make enough money to support the family he had left in Delhi.
Things looked bad from the start. His only contact failed to turn up to meet him and Wouhra was forced to hop on a bus to Southall in west London and knock on doors looking for a place to stay. One family eventually put him up for five days before his contact arrived to take him to Wolverhampton.
After weeks of failing to find work, he discarded his turban, shaved off his beard, changed his name to Tony Deep and got a job as a bricklayer’s mate.
“I realised that I would not get a job if I wore my turban,” he said. “Your religion is in your heart and mind and that is where you must protect it.”
After working as a door-to-door egg salesman, Deep saved enough money to buy his first shop and start a wholesale food business. Within 10 years of start-up in the mid-1960s, it had sales of £5m. Now East End Foods is a flourishing Indian foods manufacturer with a turnover of more than £98m.
Deep’s is not an isolated example. Statistics show that those who have arrived to work in Britain rather those who were born here frequently lead the way in entrepreneurship.
A report on global entrepreneurship, published last week by the London Business School, found that non-white people are 40% more likely than whites to be entrepreneurs; Indian and Pakistani Britons are twice as likely as their white counterparts to follow that route.
The Department of Trade and Industry’s Ethnic Minority Business Forum estimates that the UK’s 250,000 ethnic minority businesses contribute £15 billion a year to the economy.
And a study published last summer by Barclays Bank showed that the number of Black and Minority Ethnic (dubbed BME) start-ups had reached record levels, growing by more than a third to hit 50,000 new businesses in 2004 — 11% of all business start-ups.
However, the BME tag is misleading as it tends to be south Asians who are more likely to succeed as entrepreneurs. African and Caribbean blacks are much less likely to be self-employed.
Stories such as that of Deep abound. Take Kashmiri-born Mohammed Aslam, who came to Britain as a child when his family fled Afghanistan in 1957.
After driving buses in London for a year he moved to Bradford, where his brother had opened a restaurant. For two years he worked in the kitchen without pay before taking over the running of the establishment. Over the next 20 years, he expanded it into a 10-chain group with a turnover of £5m a year.
He attributes his company’s success to hard work and a desire to make the most of the opportunities life presented.
“If you are an immigrant in any country you always work harder to become a part of the society and the business community,” said Aslam. “Coming from a poor background, I have always been very frightened of going back to the old days and not moving forward.”
BRITAIN has long been reliant on the entrepreneurial spirit of immigrants. Companies such as Marks & Spencer, the retailer, and NM Rothschild and Cazenove in the City have their origins overseas.
“The very experience of dislocation and exile can be a powerful force for innovation,” said Susie Symes, director of the Museum of Immigration and Diversity. “London is a leading player in the world’s financial markets in large part because of the bankers and financiers who came here as immigrants.”
The museum, tucked away in a side street in east London in a house built almost 300 years ago as a residence for a wealthy Huguenot silk trader, has witnessed the influence of successive waves of immigrants on the British economy.
Huguenot merchants and Jewish tailors have plied their trades in the area, and a walk through Banglatown — as the criss-cross of streets around the museum is known — requires running a gauntlet of Bangladeshi restaurateurs who stand on the pavements touting for custom.
What is true of Brick Lane in London is also true of Pollokshields in Glasgow and Manchester’s “Curry Mile” in Rusholme — all areas where ethnic minorities have congregated and flourished.
Academics believe the success of BME businesses is partly due to their ability to draw on their families and communities for labour and capital.
Aslam’s Aagrah restaurant group employs about 230 staff, but when it started only two were fully paid. The rest were family who worked for nothing.
“When my brother first started, he had a lot of trouble getting money from the banks, which would put up only half of what we needed,” said Aslam.
“The family and community were able to help us out, not only by raising money but also by putting in recommendations for us at the bank.”
Drawing on the support and resources of the community, known as social capital, is a common theme in ethnic enterprises. Richard Robert, small and medium enterprise research director at Barclays, compares it to an old-boys’ network.
“Ethnic minorities can live in quite closed communities with very strong links between family members or geographical areas,” he said. “This has a networking effect and those who are good networkers tend to be more entrepreneurial.”
Unfortunately there are those who fail to see the economic benefits of immigration. Around the corner from the museum, on Brick Lane, is Cafe Naz, a Bangladeshi restaurant that in 1999 was almost destroyed by a nail bomb planted by a neo-Nazi.
The restaurant’s owner, Muquim Ahmed, is thought to be the first Brick Lane millionaire. He arrived in east London in the early 1970s, aged 19, to study engineering with the intention of returning to join the family business.
He ended up staying when his father asked him to export goods from Britain and Netherlands to Bangladesh. Soon he was importing electronics and then he turned to property and restaurants.
“The nail-bomb was obviously a disaster,” said Ahmed, who, along with his wife and daughter, was barely 40ft from the explosion.
“But behind every disaster is often a success. I was very fortunate that nobody was killed, but the bomb also raised our profile and we managed to reopen within three weeks and enjoyed really good business.”
His property portfolio now has some 50 buildings and there are six Cafe Naz branches around the country. Ahmed believes immigrants and ethnic minorities are driven by a work ethic that can be lacking in the existing population.
“Immigrants work harder because we feel we have to do that much more to earn our keep,” he said. “We have an urge that many people don’t have.”
HOWEVER, experts warn that we should not view immigrant enterprises through rose-tinted spectacles.
“Ethnic entrepreneurs should not be viewed solely as stories of extraordinary success,” said Patrick McGovern of the London School of Economics. “Small, family-run businesses have been criticised for offering poor wages and conditions, with family members working long hours for little or no direct payment. A large proportion of ethnic-minority businesses fall into this category.”
He estimates that two-thirds of the labour in ethnic businesses consists of owners or unpaid family, not employees. What is more, the supply of willing family members could be drying up.
“Second and third-generation minorities who possess British qualifications, are fluent in English and familiar with British culture are more likely to enter professional and corporate employment than start their own businesses or work in a family business,” said Professor Dave McEvoy of Liverpool John Moores University.
Figures from the 2001 census show that, on average, 20% of south Asians and Chinese were self-employed compared with a national average of 13.5%, although this had dropped since 1991, a sign that later generations were more likely to enter the labour market.
Experts foresee a new wave of immigrant entrepreneurs from other parts of the world.
McEvoy said: “In Southall, the heart of London’s Indian Sikh community, both Somali and Afghani enterprises have appeared, while in Manchester, Arab restaurants are starting to appear on the Curry Mile.”
The 2001 census also showed that black Caribbean and black African groups have a much lower proportion of self-employed people (8.2% and 9.5%, respectively), although the number starting their own businesses is rising.
Vici Ladeji, a Liverpudlian of Nigerian and West Indian descent, runs Eventa Management, having left school at 15 to work in a hairdressing salon.
“I grew up in Speke on a rough council estate,” she said. “My mum came on the Windrush expecting a good life and a warm welcome. I always had a determination to go up another level.
“It was difficult coming from a poor background. We did not have a big, extended family or a close-knit community to draw on, and I have financed everything myself. I’m not a big fan of banks — they weren’t very helpful when it came to expanding my business.”
Instead, Ladeji drew on loans and grants from organisations such as Train 2000, which promotes women in business. She believes the government should do more to promote ethnic-minority businesses.
“It’s not often I feel conscious of being a black female, but I was at a Chamber of Commerce new members’ meeting recently and it struck me that I was the only person from an ethnic minority. Organisations such as Business Link have their uses, but they need to be more community-focused.”
Adeeba Malik, chair of the DTI forum, believes that the disparity between blacks and Asians is due to cultural traditions and family networks.
“All ethnic minorities have trouble securing start-up capital but, because of their strong family networks, Asians are often able to raise finance quickly in a way that blacks can’t.”
She would like to set up a national scheme to bring together Asian and Afro-Caribbean business people. “There is a lot that could be learnt between the two communities.”
Roya Johanbin of Education Action, a government organisation that runs a small-business start-up programme for refugees in Greater London, said many refugees had the skills to succeed but didn’t know how to get started.
“Drawing up a business plan is quite an Anglo-Saxon thing to do,” she said. “There are also a range of regulatory issues we can help with.”
Banking for devout Muslims
THE biggest hurdle for all entrepreneurs is securing start-up capital. This is especially true for ethnic minorities, who can still face prejudice.
Many Islamic entrepre- neurs have to deal with an extra hurdle. Under sharia law, the paying or receiving of interest — known as riba — is prohibited, as is undefined risk — known as gharar.
Several banks have tried to get round these problems. HSBC launched its Amanah division in 2003 to give Muslims access to products such as home finance and personal accounts.
For example, under the home-finance arrange- ments, the bank will buy the property and become the title owner. The customer will be a tenant, paying ‘rent’ to the bank for a set period. At the end of the arrangement, the ownership of the property is transferred to the customer.
Although there is not yet a financial product aimed at Islamic entrepreneurs, Amjid Ali, head of HSBC Amanah UK, confirmed that plans were under way to launch such a product based on exchanging metal.
‘Under sharia law, making money on money is not permitted but making money on the exchange of an asset is,’ he said. ‘What we are planning on doing is to set up a three-way exchange with a metal broker. The bank will buy £100,000 of copper, for example, from a broker and pass it on to the customer. The customer then sells the copper to the broker for the £100,000 which it then pays back to the bank at an arranged date.’
The DTI’s Ethnic Minority Business Forum has identified sharia-compliant financial products as a key tool in overcoming one of the biggest barriers for ethnic entrepreneurs. The forum’s Adeeba Malik said: ‘There are 2m Muslims in Britain and we believe there will be a strong demand for Islamic finance.’
