A new survey from cloud accounting software firm FreeAgent has found that just 9 per cent of entrepreneurs in the UK say they plan to set up a new business in 2023, with confidence among would-be business owners falling, in spite of government growth plans.
However, while few are planning to set up a business this year, appetite remains relatively strong, with 54 per cent of respondents saying they still hope to set up a new business at some point, despite the UK’s worsening economic climate.
The key reasons why budding entrepreneurs are delaying plans to start a business include concerns about the state of the UK economy (cited by 26 per cent of respondents), cash flow worries (17 per cent) and increasing energy bills (15 per cent).
There were also widespread concerns among entrepreneurs looking to set up a business, with 35 per cent worried about paying bills amid rising costs, 33 per cent worried about the financial burden of starting a business (although this was down from 51 per cent last year), 23 per cent citing a lack of confidence and 12 per cent worried about finding the available staff.
When questioned about why they wanted to set up their own business, 47 per cent said they wanted to achieve a better work-life balance, 43 per cent sought the ability to be their own boss and 39 per cent wanted to have more control over the work that they do.
FreeAgent co-founder and CEO Roan Lavery commented: “It’s deeply concerning that just 9% of budding entrepreneurs want to start a business this year. Clearly the economic instability and the ongoing cost-of-living crisis are having a significant impact on the UK’s would-be entrepreneurs, and our research calls into question whether the government’s growth ambitions are realistic.”
“Simply acknowledging that the current economic landscape is making it difficult for small business owners to thrive is not enough. The government needs to take definitive steps to nurture the SME sector, including developing policies that inspire and support Britain’s budding entrepreneurs.”
Lavery added: “I would like to see the government prioritising simpler – and lower – business taxes for freelancers and small businesses, cracking down on tax evasion and avoidance from multinational businesses, and introducing more statutory protections for the self-employed. It’s vital that we do everything possible to support this important part of the economy, so that it can lead the way to recovery in the coming years.”
