How much are freelancers willing to put at risk?
80 new businesses were created every hour across the UK in the first half of 2021. What does this say about Britain’s appetite for risk and are company founders putting all their chips on the table?
Over half (57%) of Britain’s entrepreneurs are “very willing” to put their personal finances at risk to pursue their dreams of becoming a business success, according to new research conducted by price comparison site, NerdWallet.
Meanwhile, more than 2 in 5 (42%) of startup and freelance founders read business magazines/pages to help them achieve startup success. Yet, most have no formal training. nor a business degree.
This is at a time when entrepreneurship is booming, with a recent study by iwoca (based on the latest Companies House data) revealing that almost 80 new businesses were created every hour across the UK in the first half of 2021; a rise of 32% compared to 2019.
It would seem that many business owners are willing to take these risks because they are unsure how to manage their personal finances and secure financial backing in order to grow their companies and turn a profit.
How risk-averse are British freelancers and small business founders?
With 66% of entrepreneurs choosing to start their own business in a bid to achieve financial freedom, NerdWallet’s survey reported an attitude of ambitious risk-taking when it comes to personal finances among British business owners.
- 31% were willing to put their house on the line to make their business sustainable; with a further 45% giving it some serious thought.
- 36% were willing to risk their life savings to go all-in on their business venture; with 42% giving it some serious thought.
- 35% are not afraid to take on a massive loan to make their #BossLife dream a reality; with a further 44% giving it some serious thought.
Many of the business owners surveyed have experienced challenges with securing financial backing (52%), choosing the right business insurance (31%) and growing their business to a point it turned a profit (40%).
That said, significant compromises were made by many of them who admitted that they felt “daunted” by the financial risks involved.
These risks they took to see their business through its first year:
- living from paycheck to paycheck (33%)
- borrowing from friends and family (33%)
- taking on a major loan (35%), or putting their life savings (36%)
- mortgage (32%) or house on the line (31%),
Is being your own boss becoming “glamorised” on social media?
Although 16% of respondents had a business degree, the majority went into their new ventures with no formal training. 54% sought the counsel of financial advisers, 43% turned to banks/insurers, 42% read business magazines, and 39% took on a business mentor or coach to help them achieve startup success.
Despite 91% of respondents feeling that being your own boss is “glamourised” on social media or in popular culture, only 28% turned to celebrities, influencers or Instagrammers for business tips.
“It’s clear that entrepreneurial spirit is alive across the United Kingdom, and it’s great to see that so many business owners are willing to give it all they’ve got to make their dreams become a reality,” said Denise Ko Genovese, a Senior Personal Finance Expert at NerdWallet.
Are financial experts worth the money?
“But our research also highlights that in order to reach their goals, these budding entrepreneurs and small business owners need the help of financial experts, from banks and insurers to business mentors and advisers, to ensure that their money is being put to good use and takes them in the right direction.”
Despite the many challenges thrown at modern business owners, 91% surveyed said they feel more optimistic now than pre-pandemic and, no matter how tough the business landscape is post-lockdown, 94% said they’d still do it all over again, reflecting just how strong entrepreneurial spirit in the UK remains.
“The resilience and optimism shown by entrepreneurs, and business owners as whole, is admirable, and bodes well for the country’s future and post-pandemic recovery,” said Ko Genovese.
Articles that may spark your interest:
Which Country is the Cheapest for Starting A Business? – Freelance Informer
Greece entices international freelancers with tax breaks and residency in bid to replace lost tourism – Freelance Informer
Compliance platform Xolo raises €3m to support post-pandemic solopreneur boom – Freelance Informer
Want to be £47K better off and boost your confidence? – Freelance Informer
Creditors free to go after distressed companies – Freelance Informer
Don’t be a tax relief loser – here’s how to protect your hard-earned cash – Freelance Informer
Freelancers could be among small business owners that lose £5.6 billion a year in unclaimed expenses – Freelance Informer