The research findings, which were announced by Luke Johnson, Chairman of Risk Capital Partners, and a leading business angel, challenged a number of current perceptions, in particular, that lack of funding from banks is the biggest obstacle for entrepreneurs; and that the recession is the key reason business owners are not investing to grow their business.
However the main findings in the report showed:
- 62% of those interviewed have consciously chosen to self finance or use savings to grow and develop their businesses, rather than taking on debt, with only 26% turning to banks for financing.
- 30% of businesses have no plans to invest in growth for the next 2 to 5 years.
- There are underlying structural issues around business’s desire to invest, as 40% of those asked said their decision not to invest in growth and development had nothing to do with the recession.
The overall feedback from respondents, coming just days after the government announced the closure date and changes to Business Link, showed that whilst support for start-up businesses is readily available, there is a lack of advice and support for businesses looking to expand. There was a clear need for better guidance if entrepreneurs are to develop fully-fledged businesses and support the UK’s economic recovery highlighted.
According to one entrepreneur: “The government should support start-ups, there is no doubt about that, but there is a need to be more strategic about that support and to recognise there is not a lot of support for those who want to accelerate.”
The report also offers a number of recommendations including the following:
- Government initiatives that focus solely on incentivising banks are of limited value – instead it is time to consider a wider, holistic range of options for those seeking finance.
- Entrepreneurship is not just about setting up businesses, it is about long-term growth and success and entrepreneurs need to be advised accordingly.
- The private sector needs to collaborate with the public sector in supporting entrepreneurs resulting in better use of funds, more successful projects and less bureaucracy.
Colin Stanbridge, Chief Executive of The London Chamber of Commerce and Industry, said: “Some 490,000 private sector jobs must be created in the coming year to meet current economic forecasts. Entrepreneurship will be critical to secure a sustained recovery as well as to build the long term growth necessary for the UK to compete effectively in the global market.”