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One in six aspiring UK business owners put off by financial risk

Abigail Fenton
·Writer
·2 min read
Six in 10 young adults would like to have their own company one day, according to a survey. Photo: Adeolu Eletu/Unsplash
Six in 10 young adults would like to have their own company one day, according to a survey. Photo: Adeolu Eletu/Unsplash

One in six UK adults want to start their own business, but a lack of money or fear of losing it is holding them back, according to a study.

About 17% of young adults aged 18 to 55 want to start their own company, a survey of 1,247 by digital agency Studio Graphene.

However, 60% said the financial risk they would have to take on is a major barrier to their ambitions – making this the main challenge to entrepreneurship in the UK.

Almost half (49%) said they had insufficient funds to get their business idea off the ground in 2020.

Meanwhile, a similar number (48%) were tripped up by the complexity of properly setting up a new company.

READ MORE: Central London told to focus on startups and artists to aid recovery

Another challenge, cited by 47% of would-be entrepreneurs, is a lack of skills and knowledge around being a business leader.

Meanwhile, nearly a third (35%) want to launch a new technology product but do not know how to go about developing it.

Nearly as many (32%) said someone else has now beaten them to their idea.

“Through all the challenges, uncertainty and hardships of 2020, we have also seen a rise in the number of people keen to start their own business,” said Ritam Gandhi, founder and director of Studio Graphene.

“Born out of a difficult job market and a wave of fresh opportunities as we adapt to the ‘new normal', Britons’ entrepreneurial ambitions are to be celebrated.

“However, our research suggests that there remain major challenges preventing the country’s brightest minds from developing new products and services.

Over 1,000 UK startup businesses have already collapsed as a result of the COVID-19 pandemic.

READ MORE: These 6 startups turned unicorns amidst the pandemic

He added: “While the financial risks cannot be removed, we can certainly do more to help people understand the finer points of how to form a new company and get their business started.

“What’s more, it’s important to note that many of the best startup founders do not have all the skills needed – that is why they form teams and partnerships.

“From developing the technology to nailing the marketing strategy, no entrepreneur has to go through this journey alone.”

WATCH: How AI can help eliminate the bias from startup investing