More and more people are starting their own businesses

by Barrie Hopson on December 7, 2014 · 0 comments

in Future of work,New ways of working

Experian plcNot every portfolio worker is an entrepreneur but many are. As such some of the latest findings on entrepreneurship in the UK are fascinating.

According to new data from information services firm Experian, more first-time entrepreneurs are starting businesses than ever before, and these debut directors tend to come from less affluent backgrounds than the entrepreneurs of yesteryear.

A third of the first-time business owners that started a company last year had a household income of less than £25,000 a year, the report showed, up from less than a quarter in 2009.

Some 7.7pc of these new businesses owners live in social housing, more than double the 2009 figure, suggesting that the modern entrepreneur is less likely to rely on assets such as their homes to raise start-up capital.

So do not think that you necessarily need large sums of money to start a new business. Clearly that is different if you require a large capital set up as in manufacturing.

Most of these new entrepreneurs are “bootstrappers”, the report found, starting their companies on a shoestring budget. Almost 93pc launched their businesses with less than £1,000.

Fewer people are tapping into their savings to launch companies, which may be down in part to the changing age demographic of UK entrepreneurs.

A decade ago, the average entrepreneur was a white male in his early forties. However, a study by insurance broker Simply Business has found that the age groups that are most likely to start a business are now 18-24 years and 25-34 years, based on three years of data between 2007 and 2010.

“These figures suggest a shift in how we should view the average UK entrepreneur,” said Max Firth, UK managing director for Experian Business Information Services. “It’s not all high-tech start-ups and Dragons’ Den-style big ideas.

“An increasing proportion of new business directors are making the most of the lower start-up entry levels; grabbing a mobile phone, a laptop and a flexible workplace, and creating their own jobs and their own opportunities.”

More than 500,000 businesses were created in the UK last year, up almost 10pc on the year before. However, the poorer the first-time director, the lower the start-ups chances of survival.

While business survival rates are rising on average year-on-year, from 76pc in 2009, to 87pc in 2011, the likelihood of a start-up staying in business after two years drops to 84pc for those from less affluent backgrounds.

“Some may still lack the experience, capital and contacts needed to survive those first few tricky years,” commented Mr Firth.


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