UK’s micro-businesses opt to self-fund their start-up costs
Yet the majority of freelancers of micro-business answers are unable to make enough money to cover their costs
Starting a business “doesn’t mean breaking the bank” as the majority (80%) of UK freelancers and micro-business owners have self-financed their ventures, FreeAgent has reported.
Surveying more than 500 micro-businesses – those with less than 10 employees – the research argued that micro-business owners are becoming far less reliant on external financial support.
Alternatively, start-up entrepreneurs were found to have used personal savings to start-up (43%) while 44% said they hadn’t actually required any funding to get their business idea off the ground.
While getting started doesn’t seem to be a problem, the research did find that many micro-businesses struggle to cover their costs – 41% said they “only just” made enough money to cover costs.
Work/life balance is also a issue among the UK’s micro-business and freelance community. 44% haven been unable to take a week or more of holiday during the last six months due to work commitments.
Ed Molyneux, CEO and co-founder of FreeAgent, commented:
“A major barrier for people thinking about starting a business can be the costs involved. They think they’ll need to spend a lot of money from the outset on building the right infrastructure for their business, and the idea of applying for bank loans, grants or other financial assistance is very unappealing.
“But the reality is that the majority of UK micro-businesses don’t actually require this kind of investment from the outset. By understanding their finances more clearly, we believe [micro-business owners] will be better placed to spot new opportunities to improve their cash flow and gain enough confidence to take a well-deserved break from their business.”