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.
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“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.”