Young start-ups "more optimistic" than established firms
Two surveys by the Institute of Directors reveal that founders of young companies are feeling much more confident about their prospects than directors at more established businesses.
A recent IoD survey of 628 members of the IoD99, a group for entrepreneurs set up in 2015, found that 83% say they are very or quite optimistic about the prospects for their business over the next 12 months. By contrast, only half (56%) of 687 business leaders polled in the IoD's overall membership said they feel optimistic about their own companies.
Both groups of business leaders report lower confidence about the economy in general. Just four in ten in the start-up group say they are optimistic about the UK's performance over the next 12 months; one third of the IoD's whole membership say the same.
Amongst the entrepreneurs, the UK's uncertain trading status with the EU tops the list of challenges to growth. A preferential agreement with the EU on the movement of labour is the top Brexit priority (48%) for members of the IoD99, closely followed by the need to maintain the rights for EU citizens in the UK and vice versa (44%). The latter continues to be the leading priority for the wider IoD membership.
Access to finance is the 99ers' second biggest challenge to growth. However, the findings show very poor awareness of key Government initiatives aimed at promoting investment in younger companies. When provided with a list of flagship schemes - including the Enterprise Investment Scheme, Start-Up Loans and the Help to Grow loan programme - no scheme was recognised by more than half of those surveyed. Knowledge of the British Business Bank stood at a worryingly low 17%.
Stephen Martin, IoD director general, said: "Even in light of the uncertain political climate, our start-up founders are demonstrating that the British entrepreneurial spirit is alive and well. In fact, I have no doubt that the IoD99 will be at the vanguard of those seizing the opportunities that arise in the years to come as we leave the European Union.
"In some ways, confidence must come naturally to an entrepreneur. The twin requirements of a healthy appetite for risk and enough conviction to weather the storm of starting a new business are not traits found in timid people. Change is not always bad for business and we need to have a different perspective for these ever-changing times. Only creative thinking will lead to the new products, services and ways of doing things that can transform our lives."
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