More than half a million businesses were created in the UK last year with the proportion of first-time directors rising by nearly thirteen per cent and the data suggests that not only do they have less start-up capital than previous years but also come from a lower affluence band when comparing these individuals’ incomes, property values and net worth to national averages.
The positive story for UK start-ups and the UK economy doesn’t stop there, with business survival rates also on the up year-on-year, from 76 per cent in 2009, to 87 per cent in 2011. The survival rate measures businesses still trading two years after start-up, observing companies which have survived up to the end of 2013.
Overall, those less affluent Debut Directors have a slightly lower chance of survival, but a savvy approach to business and credit management can increase those chances significantly.
Max Firth, Managing Director for Experian Business Information Services, UK&I, said: “These figures suggest a shift in how we should view the average UK entrepreneur. 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.
“While this increasing population of Debut Directors should be celebrated, there’s much they can do to improve their chances of success. Some may still lack the experience, capital and contacts needed to survive those first few tricky years. So it’s crucial for young entrepreneurs to tap into business support networks for advice and they shouldn’t underestimate the value in partnering with a more experienced director if they can. Just as crucially, they need be aware of how others may see their business and the impact this could have on their access to essential services and potential funding opportunities.
