Fear of failure holding back UK’s aspiring entrepreneurs
Financial pressures and a fear of failure are holding back the UK’s entrepreneurs, despite rising business confidence across the nation.
Research from self-storage provider Space Station found that four in five individuals want to start their own businesses, yet more than half cite financial risks as a factor that puts them off doing so.
Around four in ten also said that a fear of failure is holding them back, as they do not want to end up in a poor financial position if it doesn’t work out.
The study found that 65% of women and 59% of men aspire to work for themselves despite all of the financial fears and concerns.
Securing funding was also named as an issue for many, although there are a range of factors available that can assist businesses with refinancing.
Economic instability, in part driven by ongoing uncertainty surrounding Brexit, was another issue that caused owners to have second thoughts.
Flexibility and adaptable working hours were the main reasons cited for wanting to start a business, alongside the possibility of being financially independent.
While the number of people starting up a business has climbed steadily in recent years – more than 650,000 were set up during 2016 – it is by no means a measure of success.
Survival rates are high for the first year as finances are often available to cover any shortcomings, but it is after three, four and five years that difficulties can appear.
Figures from Ormsby Street show that six in ten firms in certain sectors will fail to reach their fifth birthday, as longer-term survival becomes more difficult.
Cash flow difficulties from poor supplier conduct, late payments and reduced sales can all have a serious impact and are not problems that can quickly be put right.
However, undertaking an independent business review may showcase a potential option that was not previously considered, or find a method of improving operational efficiency.
By Phil Smith