Setting up your own business is a young person’s game as new research reveals that the average age Brits decide to go it alone is just 27. The analysis by cloud accounting software company Xero found that entrepreneurial spirit is getting younger, revealing 20 as the age that young business owners (18-34) decided they would like to set up shop compared to those aged over 45 who had the same lightbulb moment at 35. In fact, almost seven in 10 (69%) new businesses set up in the past five years have been started by those aged between 18-34.
The survey of 1,000 small business owners also found that eight out of 10 start-ups begin life with friends or relatives of the founder being roped in to help out, with the majority of business owners preferring to call on their nearest and dearest than risk taking on unsuitable candidates.
The research marks the launch of Xero’s #behindyourbusiness campaign to encourage other budding business owners to take the plunge, as it reveals that 82% of small business owners say they are now running the business they always dreamed of. Being their own boss is the best thing about owning a business (51%), followed by being able to control work/life balance (38%) and being able to get things done the way they want them to (35%).
Nine in ten small business owners say setting up shop is one of the accomplishments they are most proud of, as half liken the buzz to the feeling of buying a first home (48%). One in five compare it to the birth of their child (19%) and some even to their wedding day (16%). The research found that entrepreneurs are driven by a need for more flexibility (36%) and to take control (35%), while other reasons include not enjoying working for somebody else (23%) and wanting to make their family proud (19%).
However, in a world where only four in 10 (41%) businesses reach their fifth birthday*, the new research found that a fifth of start-ups launch without a fully fledged business plan. The insight comes as a previous report from Xero found that just 14 per cent of failed small businesses used software to manage their finances compared to 58 per cent of successful business owners, while only 20 per cent of failed small businesses spent money on marketing campaigns versus 49 per cent of those who have succeeded.
Small businesses named making the right hires (32%), the inability to switch off (29%) and late payments (29%) as their biggest barriers to success. The majority resort to enlisting friends or family to work for their business, because they can trust them (35%), understand each other (34%) and know they will be committed (28%). But despite the stresses and strains of owning your own business, today’s small business owners put a priority on work/life balance – as eight in ten say they ‘work to live’ rather than ‘live to work’.
The ability to be adaptable (31%), putting accounting support in place from day one (23%), and networking with inspiring people and peers (22%) were the three pieces of advice small business owners wish they’d been given when they started out.
Respondents named Bill Gates (25%), and home-grown talent Richard Branson (24%) and James Dyson (17%) as the three living business icons they most look up to – beating out US Business tycoons Donald Trump (6%) and Elon Musk (14%).
Gary Turner, MD and co-founder of Xero, commented: “Small business owners don’t always have an easy run of it. But, despite this, every day I see just how passionate and eager they are to turn their dreams into realities. While this passion is fantastic, it will only get you so far. We know that survival rates of small businesses with watertight business plans and the right processes are far greater than those who fail to put the right provisions in place – so it would be a huge shame to see this enthusiasm go to waste.”
#behindyourbusiness champions the people, passions and purpose behind Britain’s small businesses, fronted by companies including lingerie and hosiery business Nubian Skin, The Italian Plumber and Papersmiths stationery company. Five up close and personal videos reveal the personalities, experiences and motivations behind Britain’s small businesses, celebrating the SMBs behind 60% of the UK’s GDP.