Access to finance a key factor for launching a business
Research commissioned by the International Business Festival has found that access to finance is one of the biggest factors behind SMEs launching a new business.
The study, which was carried out by business research agency Coleman Parkes, surveyed 500 UK-based owners, directors and senior managers of SMEs with 9-100 employees, exploring topics such as access to finance, business confidence and generating ideas.
The research identified the most common ways that SMEs fund their business, with asset finance leading the way at 52%. This was followed by debt (46%), equity (40%) and cash reserves (32%).
More than 65% of business leaders said that they lacked the knowledge needed to launch their business, while 55% did not have enough confidence to change their career and more than 55% relied on regular income.
The research also highlighted the regional differences when it comes to setting up a business, with 43% of Londoners aged 18-24 being the most active in terms of generating new commercial ideas, higher than the national average of 35%.
More than 45% of entrepreneurs are inspired to start a business between the ages of 25 and 34, compared to 12% who get their business inspiration between 35 and 44.
Commenting on what is needed to successfully transform ideas into a business, 2018 International Business Festival Chair Max Steinberg said: “Every business starts with a lightbulb moment but it requires specialist knowledge and expertise to successfully turn ideas into enterprise.”
He added: “Entrepreneurs with great ideas can be hindered by a crisis of confidence, which is why human connections are important to provide reassurance and inspiration. No entrepreneur is an island and going it alone doesn’t need to be lonely.”