Half of Brits dream of going it alone but financial fears block them from starting their business
Sage has unveiled research showing that 1 in 2 (52%) UK adults dream about starting their own business. However, over half (53%) of those feel that money worries are stopping them from turning the idea into a reality - a fear that has been exacerbated by the stresses of COVID-19.
In reality, only 17% of current business owners said that a lack of finance turned out to be a barrier when setting up their business - highlighting a significant gap between the perception and reality of entrepreneurship.
Small business creation and growth is crucial to a successful post-Covid economy. The UK economy is driven by SMBs, with 99.3% of GDP generated by companies with under 50 employees.
Sage research shows 43% of working people have had their careers impacted by the pandemic, through furlough, redundancy and reduced hours. This has created a groundswell of people that have the time, the headspace and the motivation to innovate and launch their small business dreams.
This has showcased the next generation of new businesses that are leading the recovery. Of the 34% of business owners that started their business in the last year, 61% were aged between 18- 34, highlighting the entrepreneurial spirit is alive in and kicking amongst Generation A and Millennials.
However, 37% of people who dream about being their own boss mistakenly believe that business owners are rich, privileged or received financial help to get started, and therefore fail to get over the starting line if they do not get the support they need. But, in reality, 40% of current business owners shared the same concerns when starting out.
Jen Walker, Founder of Split Screen Coffee, a Sage customer and entrepreneur, said: “There are so many myths to break through when you are starting out in business, which can be a real stumbling block. What budding entrepreneurs need, and certainly I did, is real clarity around what was required to start a business: the facts, insight and access to mentorship. Having a network of support around me enabled me to sense check with likeminded people and gave me the reassurance and confidence I needed that I could do it. Once you demystify the startup worries the business road becomes a much easier one to travel on.”
Paul Struthers, Managing Director, UK and Ireland, Sage, said: “People who dream of creating a business have misconceptions around how much knowledge of accounting, tax and compliance they need to have before getting started. Sadly, a lot of aspiring entrepreneurs give up their dreams of becoming their own boss, either because they don’t know where to start or they overestimate the amount of money and time required to run a business.
“Preparation is key. Before you launch your company, spend time researching your market and potential buyers, and the financial support options open to you. Test out your products or services in your local community or on social media. Ask for feedback from your friends and family, or social media followers. Getting your finances under control is a key attribute in success businesses, but this is also the biggest hurdle for most startups.”