UK start-ups increasingly pooling resources to combat cashflow problems

Report finds that small firms blame access to financial resources as main reason for hampering growth

Start-ups in the UK are adopting increasingly inventive measures to maximise funding efficiency in the face of concerns over access to finance and cashflow, a new study has found. The Smarter Business Blueprint, a survey of 1,000 early stage businesses commissioned by car hire firm Zipcar, found that UK start-ups attributed lack of access to funding, cashflow problems and lack of government funding as the main reasons they have not grown as they would have liked. In response to this, the study found that start-ups are turning to pool their resources with each other to maximise efficiency and make better use of their available capital. Over half of businesses surveyed said that they were currently sharing some core business functions with other firms, with a further 21% planning to in the next year. Whilst most sharing between businesses was of tangible assets – such as vehicles and cars – the report found that 31% of start-ups have now taken to sharing staff, accessing their expertise on an ‘on-demand’ basis. The top three shared infrastructure costs were technology (22%), office space (22%) and vehicles (15%). Accounting staff were the most commonly shared among start-ups (35%), followed by logistics and administration (21%) and human resources (15%). The report outlined a six-point plan for early-stage businesses to ensure their survival, including putting ‘beta’ versions of business models on the market as soon as possible, adapting quickly to the progress of technology and offering equity as an incentive to staff. Mark Walker, general manager of Zipcar UK, said: “Over half of the start-ups we researched said that they weren’t growing as fast as they would like. As a company, we are passionate about supporting the next generation of start-ups. “It was with this in mind that we developed The Smarter Business Blueprint. We want to help the thousands of UK start-ups to get the inside track on how to survive and thrive in today’s challenging economy.” Kai Peters, chief executive of Ashridge Business School, added: “This research shows that a new breed of enterprise is emerging across the UK SME and start-up community, embracing an innovative combination of agility, collaborative strategy and customer-driven adaptation – all needed to thrive in today’s fast evolving and unpredictable economy.”


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