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One in 10 UK adults would like to start a business in the new year, which would almost double the number of businesses operating in the UK, new research reveals.
According to the report commissioned by Block and undertaken by Public First, the UK has a growing entrepreneurship culture. It found that 15% of respondents are already running a side hustle, and 13% do additional jobs to supplement their income, such as tutoring and babysitting.
The entrepreneurship boom is driven by younger generations in particular, with more than two thirds of those aged 18-34 considering working for themselves, and 38% in that age bracket already operating their own business or side hustle.
But there is still a gender gap, with 29% of women aged 18-34 having started their own business or side hustle, compared to 42% of men.
Barriers to the side hustle boom
When asked what solutions are needed to solve the barriers they face to grow, those already running side hustles named improved access to finance (37%), better tools and technology such as payment systems or website software (30%) and help with marketing and growing an audience (30%) as the top three.
The report claimed that traditional finance is not working for small businesses and “a huge opportunity is being overlooked”. It said the UK has the highest SME loan rate in Europe and every year, more than 50,000 viable SMEs with low default rates are denied capital, which costs the economy £4 billion.
According to the report, meeting the finance needs of SMEs which are currently being rejected from loans each year could unlock up to £7.4 billion for the UK economy.
Rich Bayer, CEO at Clearpay, at Block, said:
“If just an additional 1% of SMEs were able to boost their productivity to the point where revenue was growing faster than headcount, it would contribute an additional £24.6 billion to the UK economy each year. This is a huge untapped opportunity. Access to innovative digital solutions, like payment tech, are critical to help these businesses scale up profitably at a time when consumers expect a choice of payment methods at the checkout.”
John O’Beirne, CEO of Squareup International, at Block, said:
“The ambition to start and grow businesses is there, but many entrepreneurs still find the financial system stacked against them. Access to fairer and more flexible funding provides entrepreneurs with the freedom to start and scale their businesses, manage cash flow, and invest in growth.
“When small businesses can plan ahead and access the resources they need, they build stronger local communities and contribute to the wider economy. Ensuring Britain’s next generation of entrepreneurs can reach their potential ultimately feeds into Britain’s overall economic health.”
The report was launched at an event in Parliament attended by SMEWeb. Speaking at the event, hospitality business owner Jayke Mangion called on the government to tackle the constantly rising costs that businesses are facing, or risk seeing business owners leaving the UK. Read more about what he said here.
