Setting up your own business is a young person’s game as new research reveals that the average age Brits decide to go it alone is just 27.
The analysis by accounting software company Xero found that entrepreneurial spirit is getting younger, revealing 20 as the age that young business owners (18 – 34) decided they would like to set up shop compared to those aged over 45 who had the same lightbulb moment at 35. In fact, almost 7 in 10 (69 per cent) new businesses set up in the past five years have been started by those aged between 18-34.
The survey of 1,000 small business owners also found that eight out of 10 start-ups begin life with friends or relatives of the founder being roped in to help out, with the majority of business owners preferring to call on their nearest and dearest than risk taking on unsuitable candidates.
The research marks the launch of Xero’s #behindyourbusiness campaign to encourage other budding business owners to take the plunge, as it reveals that 82 per cent of small business owners say they are now running the business they always dreamed of. Being their own boss is the best thing about owning a business (51 per cent), followed by being able to control work/life balance (38 per cent) and being able to get things done the way they want them to (35 per cent).
Nine in ten small business owners say setting up shop is one of the accomplishments they are most proud of, as half liken the buzz to the feeling of buying a first home (48 per cent). One in five compare it to the birth of their child (19 per cent) and some even to their wedding day (16 per cent). The research found that entrepreneurs are driven by a need for more flexibility (36 per cent) and to take control (35 per cent), while other reasons include not enjoying working for somebody else (23 per cent) and wanting to make their family proud (19 per cent).
However, in a world where only four in 10 (41 per cent) businesses reach their fifth birthday, the new research found that a fifth of start-ups launch without a fully fledged business plan. The insight comes as a previous report from Xero found that just 14 per cent of failed small businesses used software to manage their finances compared to 58 per cent of successful business owners, while only 20 per cent of failed small businesses spent money on marketing campaigns versus 49 per cent of those who have succeeded.
Small businesses named making the right hires (32 per cent), the inability to switch off (29 per cent) and late payments (29 per cent) as their biggest barriers to success. The majority resort to enlisting friends or family to work for their business, because they can trust them (35 per cent), understand each other (34 per cent) and know they will be committed (28 per cent). But despite the stresses and strains of owning your own business, today’s small business owners put a priority on work/life balance – as eight in ten say they ‘work to live’ rather than ‘live to work’.
The ability to be adaptable (31 per cent), putting accounting support in place from day one (23 per cent), and networking with inspiring people and peers (22 per cent) were the three pieces of advice small business owners wish they’d been given when they started out.
Respondents named Bill Gates (25 per cent), and home-grown talent Richard Branson (24 per cent) and James Dyson (17 per cent) as the three living business icons they most look up to – beating out US Business tycoons Donald Trump (6 per cent) and Elon Musk (14 per cent).
Gary Turner, MD and co-founder of Xero, commented: “Small business owners don’t always have an easy run of it. But, despite this, every day I see just how passionate and eager they are to turn their dreams into realities. While this passion is fantastic, it will only get you so far. We know that survival rates of small businesses with watertight business plans and the right processes are far greater than those who fail to put the right provisions in place – so it would be a huge shame to see this enthusiasm go to waste.”