Starting a business has long been an attractive concept. In fact, around 600,000 new businesses are launched in the UK each year. With self-employment offering a whole host of benefits from flexible working hours to a real sense of ownership and achievement, it’s easy to see why entrepreneurship is such a popular venture. However, despite the countless rewards that can come with running your own business, many people struggle to get their ideas off the ground due to these common obstacles.
Fear of failure
According to a survey of 2,000 UK adults by icount, one in five people dreaming of starting their own businesses are reluctant to actually set the wheels in motion due to a fear of failure.
Often, this fear of failure can be linked to income. For example, if a budding entrepreneur is the primary earner in their household, they may feel under immense pressure to ensure their business is a success. When faced with fears of business failure, it’s easy to see why so many prospective business owners are scared of giving up the day job and leaping into the unknown.
Some people also worry what people will think of them if their company fails, particularly if they have to sacrifice the stability of a full time job in order to pursue their dream.
A lack of savings
31% of respondents in the icount survey planned to use savings to fund their business ventures, but for those without money in the bank, getting their business off the ground can be really difficult.
Many potential business owners postpone or even abandon their plans due to a lack of savings. For those in full time employment, taking the leap to self-employment can be a scary move without a stash of cash set aside. After all, if things get off to a slow start, the bills still need paying.
If a lack of savings is holding you back, make saving your number one priority. Perhaps you could work overtime in your day job, ask for a pay rise (of course, keep your self-employment dream under wraps for now), and slash your expenses until you have a special cash stash.
If you’re able to make a start on your own business while already employed, this can be a great way of getting the ball rolling without giving up the security that comes with your current job.
Difficulty accessing funding
Entrepreneurs often seek business loans in an attempt to fund their ideas, but with lenders tightening their criteria in recent years, it’s not uncommon for such loans to be difficult to access. Those with a bad credit rating or a history of debt can find it particularly difficult to access the funding they need.
Having a business bank account can be a great first move to securing funding, but of those surveyed, 7% were even rejected when applying for such accounts.
Thankfully, there are finance options out there for people with a less than perfect credit history. For example, if you find that your business account application is refused, there are low cost alternatives to the traditional business bank account worth consideration.
Once you’ve got a business account in place and you’re able to keep your personal finances completely separate, it’s time to up the ante when approaching banks to request financial help. Make sure you have a solid business plan in place. By proving that you’ve done your research and there’s a demand for your product of service, you’re more likely to access the money you need.
Alternatively, if you’ve got a great business idea that’s likely to generate plenty of hype from potential customers, an online crowdfunding project could be a low-cost solution. This can be particularly rewarding if you’re able to attract publicity from PRs, journalists and influential bloggers.