Shoestring startups show resilience with a third of companies founded on 250
A new study demonstrating the long-term potential of shoestring startups founded on tight budgets has challenged the expectation that a business needs significant financial backing to succeed.
The research, undertaken by Yell Business ahead of Independent Retail Week, surveyed 1, 500 small UK business owners to find out how much new ventures were costing to launch.
Some£40 per cent of companieswere founded on under 500, while a third managed to take off with funds of just 250.Meanwhile, 93 per cent reported they had recorded a profit in the past year.
Yell Business also surveyed 1, 500 UK consumers to gain an insight into attitudes towards the entrepreneurial world.
Over half of the population admitted they had considered starting a company of their own and almost a third unhappy with their current career but several risks were commonly cited as holding back a new wave of business owners.
With 40 per cent of the vote, insufficient funding was far and away the biggest barrier to starting a business. A risk of failure was also keeping a quarter of would-be founders from following their dreams, while 23 simply didnt know where to start.
Commenting on the success of shoestring startups, Mark Clisby, Yell Business marketing director, pointed to inherited funds and redundancy as current catalysts for new founders.
hopefully, the positive revelations around low startup cost and high success, will give the inspiration needed to budding entrepreneurs, so that they don’t wait for scenarios like this to happen to them, he said.
Offering pointers to potential business owners, Clisby said thorough research into the market and taking a digital-first approach were crucial starting points.
from a website, social media to reviews, this is essential for any business in 2017, he added.
With 85 per cent of founders claiming their own venture had seenat least moderate growth, the evident success of shoestring startups might be enough to spark those ambitions into life.
Puttinga shoestring startup on a platform for success
One business owner firmly in the 33 per cent is Neil Bainbridge, founder of music PR firm?Neighbourhood, a company?that has grown to now represent major clients such as Warner Music and Universal Music Group. Bainbridge recalled some of the key early decisions that shaped the future of his firmto offer some advice to aspiring entrepreneurs.
“Founding a company is of course challenging. There is ahugerange of assumptions of what needs to be done and in what order. For example, the early predicament ofestablishingtone and vision for the company you want to grow into over time, yet creating enoughflexibility in the brand to avoid’suppressingnew opportunities and direction.
as a service-based company the onlyadditional cost to bear was my own solo time and effort, so 99 per cent of any firstexpenditurewas spent with the above in mind. The same rule wouldhave applied ifI would have had access to 250 or 2500.
Bainbridge explained that getting the right first impression in terms of visual aesthetic, tone and guidelines was essential in those early stages.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.