13 June 2016 10:15
Adversity driving rise in self-employment
UK entrepreneurs are increasingly starting up new ventures after some kind of adversity, according to a new study.
Research by AXA has found that many of the UK's 5.2 million SMEs have been started amid crisis and hardship; 30% of businesses founded in the past five years were in response to redundancy or long-term unemployment. Disability, age and caring duties are also increasingly cited as reasons to become self-employed.
So-called "grey" entrepreneurs are a rising force in the UK economy, with a quarter of new businesses founded by those on the cusp of retirement (aged 55 to 65) and 7% by people of state pension age. In addition, the data shows that 17% of new businesses are founded by parents faced with rising childcare costs.
The survey also finds that the number of people turning a hobby into a money-spinner has doubled over the past five years (representing 30% of new businesses). A further 39% say their business is based on an original idea and 3% have invented something.
The research also suggests that the "school of hard knocks" could be the best start for would-be entrepreneurs. Eight in ten of those surveyed said that a life crisis had taught them survival skills needed in business. For a quarter that was a financial disaster, for 17% it was an accident or illness, for 16% depression was a factor and for 9% it was a business failure.
Few are in it for the money it seems; just 7% said getting rich is important to them; the majority of small business owners are motivated by a desire for more time with family.
Darrell Sansom, Managing Director, AXA Business Insurance, said:
"Entrepreneurs are coming from a wider diversity of backgrounds than ever before. Mums-at-home, people approaching pensionable age and those living with disabilities are all starting up in greater numbers. They're giving our economy a huge shot in the arm, bringing fresh ideas, creativity and life experience to business."