Lack of investment blocking new business ideas
Decreasing funding biggest obstacle to innovation, report finds
The UK’s small businesses are leading the world in hatching new ideas – but lack of investment ensures many of those ideas never leave the drawing board, according to new research.
“What Makes Entrepreneurs Tick”, a report commissioned by entrepreneurial management consultancy Andrum, found that over half of the 111 entrepreneurial businesses surveyed had two or three genuine new ideas that had yet to be commercialised. A quarter of businesses said they had four or more ideas waiting to be launched. However, the study also suggested that businesses will have difficulty putting the new ideas into practice. Lack of finance, confidence and time in the working day were identified as the three biggest barriers to successful innovation. Almost 40% of respondents identified lack of funding as a significant stumbling block- with recent Bank of England figures showing that the rate of business investment continues to decline overall. Somewhat surprisingly, day-to-day cashflow was ranked much lower on the list, with less than 20% of those surveyed identifying it as a major issue. Anita Weyland, a partner at Andrum, said of the report: “If companies are to persuade financial partners to back their innovation, they need more than ideas. They must demonstrate planning, a rigour around their numbers and show they have an experienced team in place to take the business to the next level.” “Many of the entrepreneurs we studied said they don’t even have enough time in the working day or enough good people in their business to succeed like they could. This will ring alarm bells with potential investors. Who’s going to back an entrepreneur who can’t manage their own diary?”