How much money do you think is needed to start a small business? If new research is anything to go by, the majority of UK entrepreneurs are managing to get ventures off the ground with minimal financing and support.
According to a poll carried out by start-up community Shell LiveWire, questioning 241 business owners across the UK, at least a quarter of new ventures are being established with an investment of less than £1,000 in the first year. A further 24% are spending less than £5,000 to get a company off the ground, while only 6.7% are putting in more than £100,000.
Other statistics revealed that 56% of entrepreneurs launched start-ups completely on their own, 20% with friends and 7% with business partners not previously known to them.
How are British entrepreneurs sourcing funding for start-up businesses?
While business loans and other types of credit are typically relied upon to kick-start an enterprise, this study suggests the majority of start-up owners are relying on the likes of personal savings for essential funding (almost 75%). Around a third of entrepreneurs borrowed money from friends and family. Only 10% took out a traditional bank loan and 5% turned to crowdfunding or re-mortgaging their home.
The number of first-time business owners starting a company with a household income of less than £25,000 is also on the increase – rising from less than a quarter in 2009 to around a third. This suggests the financial barriers into business are lessening as new low-cost routes, especially in the digital world, are becoming available.
Small businesses account for 99.3% of the UK’s private sector firms, with 3.3million registered as sole traders.
What do you make of these figures? Did you need a lot of money to get your start-up business off the ground? Let us know your views on Twitter @TheInsuranceOctopus