By Daniel Hunter
Research from Sage has revealed that Britain is on the cusp of a surge in start-ups with 25% of people aspiring to launch a business.
However, the perceived barriers, particularly around access to finance and lack of information on starting a business, means that more than two thirds of these would-be entrepreneurs will not be acting upon their ambitions in the next two years.
At a time when budding entrepreneurs are seen as critical to the UK’s fragile economic recovery, the YouGov research of more than 3,300 people suggests that high profile initiatives such as Funding for Lending and Start Up Britain are not doing enough.
A fifth of respondents (21%) stated they would not be starting a business because they did not believe they would be able to secure funding, while for 18-25 year olds the primary barrier for nearly half of those polled (45%) was simply not knowing where to start.
The study found that the barriers to starting a business significantly change with age and experience. Whilst access to finance is the biggest challenge for a staggering one in three 33-44 year olds, it is only an issue for a fifth of over 55’s. Older entrepreneurs were also found to have a clear advantage with their knowledge of how to start a business, with only 10% regarding this as their key challenge.
The research also identified strong regional differences across the UK in why people wouldn’t launch a business. In Scotland (31%) and Northern Ireland (33%) a third of respondents cited job security as their biggest consideration, believing it safer to work for someone else.
Risk aversion was less of a motivator in the North West, where the largest group of respondents (33%) said that they just don’t want the stress associated with being their own boss. The study found that would-be entrepreneurs in Wales are some of the most pessimistic with 1 in 4 (26%) stating they don’t think their business could survive in the current economic climate.
Lee Perkins, Managing Director for Sage’s Small Business Division, commented: “It’s fantastic that the UK has so many inspired people who want to start their own business, but more effort is needed to turn that intention into action. The fact that so many would-be entrepreneurs are frozen and not actually launching their business is concerning. With any job, there will always be challenges, but if you are truly passionate about your idea and making it a reality, then all of these barriers can be overcome.
“My message to anyone that’s thinking about starting a business but doesn’t know where to start is to have a hunt online; there are some fantastic resources and guides available for free. If you’re worried about access to finance then take the time to invest in developing a thorough business plan. It's true that practical and affordable loans for small businesses are not as readily available as they need to be, but our customers tell us that broadly speaking, lending has improved.”
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