Directors list skills shortages and access to finance as main barriers to success
A survey of young entrepreneurs working in the UK has found that the continuing skills shortage and a lack of access to finance are major concerns. The IoD 99 Network, the Institute of Directors’ network of more than 650 entrepreneurs under the age of 35, warned that these are the issues that could undermine or derail the country’s ‘start-up revolution’.
More than two fifths (42%) of the entrepreneurs surveyed said that they had encountered difficulties in sourcing and hiring the right people. This was given as the top barrier to growth, followed by accessing finance (39%), the high cost of finance that was available (33%), business taxes (29%) and personal taxes (26%). With regards to the skill shortage, the IoD called on the Government not to impose arbitrary restrictions on the immigration system. They claimed that this could make it even harder for new businesses to hire skilled workers from other countries around the world. This could be particularly crucial for tech-based companies requiring very specific skillsets.
Accessing business finance was given as the second most important barrier to growth, cited by more than a third (39%) of respondents. A lack of access to funding, especially in the crucial start-up phase, can not only restrict growth, but can also lead to serious financial problems that could even lead to a business facing company administration if left unchecked.
More than half (56%) of the respondents in the survey said that they had used unsecured personal finance such as credit cards while getting their businesses off the ground. 53% said money from family members had been important in the early days and 45% said they had used money from friends. Once the business is off the ground, private equity, bank and non-bank debt and private and public sector grants are all seen as important sources of scale-up finance.
When it came to reasons for starting a business in the first place, 36% said they wanted to build a successful company, 22% said they wanted to work for themselves and 21% said they wanted to make a positive social impact.
By Phil Smith
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