Even though two in five entrepreneurs fell into business ownership through redundancy (38%), four in every five say that given the chance they would do it all over again (83%).
Asked about the deterrents to setting up a business today, 80% of business owners cite access to credit, followed by red tape (71%) and lack of government support (64%). Half believe the state of the economy deters budding entrepreneurs, and market dominance by large corporations is also highlighted as a further barrier (44%).
The research points to the prevalence of flexible working practices amongst entrepreneurs, with more than half shunning traditional fixed office working. This determination to remain agile and keep overheads low suggests that business owners have learnt lessons from previous downturns, when inflexible property leases caused financial distress for 45% of UK firms.
Steve Purdy, UK Managing Director at Regus comments: “It is a hugely positive sign that business owners would choose to set out on their own again, even if many of them were ‘forced’ into entrepreneurship by redundancy. This bullish attitude will help lift Britain out of the economic doldrums.
“The Employment Allowance is a major step forward for small firms looking to take on staff, and there are a growing number of initiatives such as StartUp Loans that help firms get off the ground. It is access to credit that remains the main obstacle to starting a business.
“The onus is on entrepreneurs to control costs as much as possible, in particular when it comes to workspace. We saw a 30% increase in demand for Virtual Offices over the last twelve month period, stemming from savvy entrepreneurs who want professional services on demand without the cost of a permanent office.”
Many of today’s most successful entrepreneurs started out with a Virtual Office, for instance James Caan of Dragon’s Den fame. David Duncan, COO of Norwich-based social media management agency Square Social knows about the potential pitfalls that start-ups can encounter.
“We started the business in 2012, influenced largely by the dire state of the jobs market,” explains David. “It’s true that access to finance is a major hurdle for start-ups today and, at first, our only option was to fund the business ourselves. I ploughed a significant chunk of my monthly pay packet from my previous job into the company.”
Square Social already has a growing portfolio of B2B and B2C clients, and were recently granted a loan through the government’s StartUp Loans scheme for their next phase of growth. The StartUps package also gave them a Virtual Office from Regus, one of the scheme’s partners.
“A mistake a lot of start-ups make is an initial outlay on property. When we started out, we were a home-based business, with all team members working remotely. The StartUp loan and Regus Virtual Office has come at the right time as we consolidate our local market share and expand to London in a low-cost, low-risk way. It’s fantastic for our image to have a Mayfair business address.
On becoming an entrepreneur, David comments: “Although it wasn’t exactly easy at first, it’s turned out to be a fantastic decision.”