Last year, between May and August, more than 1000 entrepreneurs were interviewed for a joint project between the Telegraph and advertising agency, OMD UK. The aim of the project, Entrepreneurial Britain, was to determine what most worries and inspires Britain’s small business owners.
The findings gave insights into the motivations of the SME founder community and the main challenges that face them. Control over work-life balance is apparently more important than making money for start-ups, while hiring staff and raising finance are major concerns. Seems to be a questionable dichotomy there.
The desire to make money ranked sixth among the reasons people had started a business, with 54% of respondents citing it as a factor. The top reason given for launching a company was to have greater control over the work-life balance (80%).
The report also explored the main challenges faced by business owners in the areas of finance, support, staffing and brand building. Every respondent felt that the government ought to offer more proactive support for entrepreneurship. Many held concerns about finances – 56% said that financing their business with personal funds had been a challenge, while 38% struggled with personal finances.
That creating a business is a poor route to quick and easy money was well recognised by Adam Pike, co-founder of a three-year-old business, SuperCarers, an online service, through which people can book and pay for carers.
Mr Pike, taking part in a panel discussion to mark the release of the research, said that drawing a meaningful salary was a real problem for early-stage entrepreneurs, especially when profits had to be ploughed into business development due to little or no access to finance. “It’s so hard to convince banks to lend, despite three years of accounts,” he said.
His comments were echoed by Lorenzo Curci, founder and director of cycling clothing company, Huez, who explained that a lack of finance made developing seed businesses very difficult. “Crowdfunding is assisting, but it can’t replace bank lending,” he added. Although crowdfunding emerged out of necessity, since the bankss have essentially stopped loaning to new businesses.
Hiring the staff with the right skills was also a major area of concern for those who took part in the Entrepreneurial Britain report. 45% of respondents said that letting go of some control, by delegating, was a major headache for them.
But, of course, a few well-chosen hires can obviously help SME owners get a better grip on strategy and development. “It’s about freeing up capacity for you to focus on the brand,” said Mr Curci, who added that he outsources as much as possible to help avoid laying off staff during lean periods.
Mr Pike advised making the most of networks when making tricky hiring decisions. “I reached out to my network and asked people with the right expertise to sit on interview panels,” he explained.
Mike Cherry, chairman of policy at the Federation of Small Businesses, who was also on the panel, confirmed the approach. “Networking and getting support from your peers is the best thing to get you through what can be a lonely journey.”
So, if you are a budding entrepreneur, it may be a good idea to reach out to peers with the appropriate experience in branding, marketing, sourcing etc. and write your pitch to access funds via crowdsourcing, rather than going to see your friendly local bank manager.