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December 18, 2015

Lack of skills and funding hold back start-ups

Lack of skills and funding hold back start-upsBritain's start-up revolution is being undermined by a skills shortage and continued difficulties obtaining finance, according to a new poll of entrepreneurs by the Institute of Directors.

The first ever survey of the IoD 99 network - a group of more than 650 entrepreneurs under the age of 35 - has revealed that finding skilled employees and accessing scale-up finance are the most important issues for Britain's start-ups.

The IoD poll found that 42% of the entrepreneurs surveyed say they have trouble hiring people with the right skills, and 39% cite difficulties accessing finance as a potential barrier to growth.

More than half (53%) said that money from family members had been instrumental in getting their business off the ground, while 56% had used personal unsecured finance, like credit cards, and a further 45% had used money from friends.

The survey also investigated the motivations of entrepreneurs and found that 21% said the primary reason for starting their business was to have a "positive social impact", 22% said they wanted to work for themselves and 36% said they wanted to build a successful company.

Jimmy McLoughlin, deputy head of policy at the IoD, said: "The start-up revolution has taken hold in Britain like nowhere else in Europe. With so many young, exciting and cutting-edge businesses having popped up in recent years, it is vital to harness their potential and create the next raft of world-leading companies. Finding people with the right skills, and tapping into the right mix of finance will be the biggest factors in achieving scale-up success. For start-ups, overcoming these obstacles can be the difference between success and failure."

The IoD has called for the Government to open up the "equity economy" to make it easier for savers to invest in young companies and turn Britain's fledgling start-ups into scale-ups. The business group has also warned politicians against imposing arbitrary restrictions on the UK immigration system, which will make it harder for growing firms to bring in skilled workers from around the world.

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