Access to finance still the biggest barrier for start-ups – EY
Midlands entrepreneurs believe access to finance is the biggest barrier to setting up a new company, according to survey by Big Four firm EY.
Getting funding was cited by 47 per cent of respondents as a key hurdle to launching a business, followed by fear of failure (43 per cent) and uncertainty of income (44 per cent).
In contrast, only 7 per cent thought bad market conditions could hold back entrepreneurs, while just 13 per cent said the possibility of going bankrupt was a barrier to starting-up.
EY surveyed more than 30 Midlands entrepreneurs to gather their views on the factors they feel could help or hinder growth. The majority of those surveyed have well-established businesses, with 66 per cent having run their companies for at least a decade.
Adrian Roberts, partner at EY in the Midlands, said: "Matching funding to business growth plans remains a key area of concern for ambitious entrepreneurs, not least as rapid growth tends to absorb cash.
"Business leaders that develop controls over cash and cash forecasting as they grow are able to plan early for fundraising and are more likely to attract investors."
Almost 30 per cent of those asked added that using retained profit to grow their businesses would be the most attractive route if they were considering secondary funding sources.
More than a quarter said they would look to bank funding – the highest percentage of all UK regions – and 10 per cent would consider private equity investment.
Roberts added: "There are a wide variety of options for funding growth. However, these are often complex and take time to review. Those that can, would prefer to use their own internally generated funds – as illustrated by our survey.
"While there have been many initiatives around access to finance at a policy level, the responses from our survey suggest that politicians should focus on how to encourage greater investment in the fast-growth companies in the economy."