With a record 600, 000 new businesses forecasted to launch in the UK this year alone, it seems that budding entrepreneurs are buying into the government’s call for an enterprise-led recovery a campaign which only a few years ago, would have been viewed with cynicism and apathy.
The UK now boasts one of the world’s largest percentage of entrepreneurs and small businesses, with latest figures showing over 5.2m SMEs, a growth of over 50 per cent since 2000. These SMEs now account for 60 per cent of private sector employment. This growth is supported by an ecosystem which makes the founding and running of a new business now much easier than it was even just a few years ago.
First and foremost, this explosion of entrepreneurialism has been fuelled by technology, with the cost of hardware and software dropping significantly in recent years. For example, in 2000, to build an ecommerce site would have cost thousands, with the additional costs of purchasing servers and hosting fees. Today however, a fully- fledged ecommerce store based on one of the main platforms can be created for a few hundred pounds, with the website hosted in the cloud. Startups with little or no capital are able to take full benefit from the absence of upfront costs and the reduction in investment capital required to get an ecommerce business up and running.
Thanks to the development of SaaS, software designed to support file storage, CRM, customer support, email marketing and project management, which might once have proved out of the reach of smaller businesses, is now available to all through monthly subscriptions or on a pay-as-you-go basis; proving invaluable to both daily operations and business development. This significant development means that setup costs and risk are now minimised, making it easier and more substantially more attractive for entrepreneurs to set up their own business.
But it’s not only technological advancements which are fuelling this growth. It is now also cheaper and much easier to access specialised talent from around the globe. Few businesses now recruit in-house staff at the early stage of growth, and there is no longer any need to outsource specific tasks such as developers, designers, writers and marketers to expensive agencies or software houses. The emergence of online freelance marketplaces means that small business owners now have their pick of specialists from around the world, at a cost to match their budget.
There is however, a more fundamental change which has taken place within the entrepreneurial landscape over the last decade. Due to the traditionally high costs of technology and human resources, budgetary restraints once meant that most small business owners had to try and be a jack of all trades which for many, inevitably meant that some core functions were ignored, ultimately leading to failure. Very few business owners are sufficiently skilled in multiple core functions, which used to be a significant entry barrier. Today, all that is required to launch a successful business is passion, a degree of business sense, an entrepreneurial mindset and the ability to manage other people.