By Roger Baird on Tuesday 25 June 2019
Just under three-quarters of UK small business owners cited non-financial reasons as the driver for starting their firms.
Almost three-quarters of the UK’s small business owners started their firms to be their own boss, rather than make a fortune, or “create the next big thing”, according to a new report.
Sixty-nine per cent of owners said the motivation for starting their firms was to work for themselves, said a poll sponsored by small business lender iwoca.
By comparison, only 8 per cent of owners said they started their firms to become wealthy, while only 3 per cent said they wanted to change the world by creating the next Facebook or Google.
The survey concludes that in total 79 per cent of small firm heads started their ventures for “non-financial reasons,” according to the poll conducted by data firm OnePoll.
The report is an insight into a sector that Bank of England governor Mark Carney described in his annual Mansion House speech last week as the “engine room of our economy”. However, he added small firms face a £22bn funding gap.
Doing something I love
Last year Britain’s small firms comprised 5.6 million companies, employing 16.3 million, with a combined annual turnover of £2trn, or 52 per cent of all private sector revenues, according to the Federation of Small Business.
Other popular reasons for business owners starting their firms include “doing something I love”, 31 per cent, “spending more time with my family”, 32 per cent, and “I don’t like being told what to do”, 17 per cent.
Iwoca chief operating officer Seema Desai said: “More and more people are becoming aware that deriving a clear sense of purpose from your work, whether you’re a business owner or an employee, is a hugely important motivator.”
However, small business owners agreed that funding their firms was their biggest headaches.
Twenty-one per cent cited a “lack of finance” as their biggest problem, 19 per cent bemoaned late payments, with another 18 per cent blaming “red tape”.
OnePoll surveyed 1,000 small business owners between 8 May and 21 May this year.