By Deann Evans, Managing Director, EMEA, Shopify
The UK economy is built on entrepreneurship. According to the Federation of Small Businesses (FSB), there are 5.5 million small businesses in the UK. Shopify’s Aspiring Entrepreneurship 2024 Report suggests that that figure is only set to grow, with 61% of Brits expressing a desire to be their own boss in an ideal world. Across the seven European countries the research took place in, that figure rises to an incredible 77% of 16-24s, demonstrating the entrepreneurial future that lies ahead.
However, while the ambition to start a business is strong in the UK, the reality is much more challenging. According to the latest Global Entrepreneurship Monitor report, Britain is ranked just 22nd out of 49 countries in its annual ranking based on the quality of our entrepreneurial ecosystem, well below competitors such as the US and European neighbours like France and Germany.
With more potential opportunities and support elsewhere, it wouldn’t be surprising to see entrepreneurial Brits move countries to realise their dreams.
To help entrepreneurs thrive in the UK, it’s critical that everyone, from institutions and governments, to other businesses and even family and friends step in to ensure they’re supported on their journey. By breaking down the barriers to growth and ensuring entrepreneurs have access to those business and networking opportunities that enable them to thrive, they in turn can deliver benefits back to society at large.
Break down the regulatory and financial barriers
Despite inflation hitting the Bank of England’s target rate of 2% and a slight increase in GDP according to the ONS, aspiring business owners believe funding remains a fundamental problem. A third of those we surveyed (32%) said a lack of money was inhibiting their ambitions to jump into entrepreneurship.
Even those who said they weren’t thinking about starting a business said the financial obstacles were a key part of their decision (35%). It presents a conflicted landscape for entrepreneurs in the UK, where they are celebrated culturally, but conversely, growth is disincentivised.
Funding alone isn’t going to drive greater entrepreneurship though. When asked for the number one thing that could increase the number of entrepreneurs, a quarter of all UK respondents said government-led initiatives to make it easier to start a business or changes to regulation would be the biggest driver to change.
This sentiment represents a huge opportunity for future governments to break down the barriers to starting a business. From offering more access to training and skills development, to the creation of simplified single resources that provide practical guidance and information on starting a business, and cutting red tape for new small businesses to support initial growth, regulatory changes could create strong economic growth that impacts these businesses and the entire economy. But support doesn’t necessarily have to just mean changes to funding and regulation.
Support networks as growth stimulators
Being an entrepreneur can be lonely, especially in the earlier years of the business when it’s likely just the founder working for themselves and trying to grow the company. This is just part of the reason why support networks, such as online and networking communities are so important. Not only do they help entrepreneurs connect with others to reduce loneliness, they can also be opportunities to learn from each other and forge partnerships. In fact, over a fifth (21%) of current business owners also said that support came from their personal or community networks. Research by productivity experts Be The Business demonstrates the value that support, with a third of respondents noting an increase in revenue as a result of receiving advice across a range of topics.
Support networks can come from anywhere online and in real life, but what matters is that they provide entrepreneurs with the tools and encouragement they need to succeed. Larger businesses can help too, for example through programmes that showcase entrepreneurs, their experiences and how they’ve overcome challenges.
Help them to fail fast
Part of being an entrepreneur requires a recognition and understanding that failure is a real option. With over half (54%) of British business owners confirming they’ve started a business that didn’t succeed, it’s an experience shared by many in the UK, in some cases multiple times.
However, these failures are also learning opportunities for entrepreneurs to identify what didn’t work and use that knowledge for future endeavours. These business heroes cannot rise from these failures alone though: entrepreneurs need support structures in place, from networking events that provide peer-to-peer learning, to mental health and wellness programmes, they enable business owners to regroup and launch new initiatives that could be more successful.
Why does entrepreneurship matter?
Becoming an entrepreneur requires bravery, and a willingness to take a risk. If that mindset leads to success, it can have a positive impact on the wider society and drive social change. In fact, our research found that a fifth of business owners (18%) said they specifically started their business to make a positive impact on the world, while 16% did so to support their community.
Entrepreneurship is also a key driver of employment, which is essential for the wider economy. The FSB estimates that British small businesses currently employ 16.7 million people, and our research suggests that 56% of aspiring entrepreneurs said they plan to employ at least one person when they start their businesses, which could create new jobs in the UK and bring more people out of poverty.
Giving entrepreneurs the space and opportunity to create should be a top priority for everyone in the UK. But they cannot succeed alone. Changes to funding and regulations, along with robust support structures, can create an environment that will enable them to thrive, so they in turn can drive employment, provide goods and services people rely on, and lead to a stronger economy.
