At the start of 2016, UK SMEs contributed approximately £1.8 trillion annually to the UK economy (2), with StartUp Britain reporting that a record-breaking 650,000 new companies were launched in the UK during 2016. (3) A new report by the Telegraph and Omnicom Media Group entitled Entrepreneurial Britain (1), looks at the challenges facing UK entrepreneurs, in particular, what worries and what motivates small and medium sized business (SME) owners.
Conducted from May to August 2016, with more than 1,000 entrepreneurs either surveyed or interviewed, the Entrepreneurial Britain report shows 55 per cent of entrepreneurs feel positive about their decision to startup their own businesses, with just 14 per cent disagreeing that they feel satisfied.
A chief concern of this collective business sector relates to financing, as the report explains:
"Finances are a constant source of worry for entrepreneurs. Nearly four in ten entrepreneurs argue that they struggle with their personal financial security, with only two in ten saying that they don’t struggle with this. While six in ten use external sources such as banks or grants to finance their ventures, four in ten have used more personal sources such as family and friends for cash injections.
"The issue of finance is particularly important when it comes to relationships with other businesses, with cash flow often cited as a key issue in our interviews with entrepreneurs."
Staffing is also cited as a key issue, not necessarily because of a lack of talent to recruit from, but more because entrepreneurs find it difficult to hand over any form of control. The findings show that more than half of entrepreneurs struggle to trust others with business tasks. There are also concerns around employment regulation, with some saying they prefer to use contractors to avoid legal complications.
The inspiration for many entrepreneurs was the desire for an improved work / life balance. Making money ranked sixth.
When considering the future of entrepreneurialism in the UK, the report says: "The control, flexibility and financial rewards offered by the lifestyle of an entrepreneur are attractive to a wide range of the population. When we asked a representative sample from the UK if they would be interested in starting their own business in the next 12 months, we found that around 4-6 per cent of the population were planning to set a new business up. If this figure holds true, we will be looking at 2-3 million people setting up their own businesses in the next 12 months."
At Beavis Morgan, we specialise in working with entrepreneurial people across a wide range of sectors, helping them set up and run their own businesses and guiding them through each stage of the process, whilst navigating the challenges and advising them in making the right decisions both now and for the future.
We also understand that whether you’re a start up or a well-established business, cash is king and managing its flow is crucial to your immediate and long-term success. That’s why our independent finance brokerage, BM Structured Finance, is readily available to assist startups and SMEs source the right funding for their individual needs.
For more information about how we can help you and your startup or SME business, contact Steve Govey, Partner within our Beavis Morgan Entrepreneur Support Team, or Simon Belton of BM Structured Finance.
(1) The Telegraph: Entrepreneurial Britain Report
(2) The Department of Business, Energy and Industrial Strategy, October 2016
(3) Startup Britain Startup Tracker
Further reading:
More Britons looking to go it alone in 2017