21 July 2015, posted in News
Figures from Companies House show that 581,173 Start-Ups were created last year while this year it looks as though the figure is going to be closer to 600,000. But with nearly 60% of Start-Ups failing in the first five years, what can you do to survive? Can Start-Ups blame the UK tax system or because they couldn’t get a loan from the bank? Or should Start-Ups look closer to home – was it just a bad idea or should more time have been spent on planning?
With the RSA revealing that the main reasons companies give for failing is the UK tax system, lack of bank lending and too much red tape, it’s not surprising that a new idea has arisen from the ashes – incubator and accelerator programmes. Research from 02 suggests that if a business is given proper support, more Start-Ups can survive. As Feilim Mackle, O2’s Sales & Service Director and O2 Board sponsor for Wayra in the UK says:
“Start-ups play an important part in contributing to the innovation the UK needs to remain globally competitive, and the report shows that accelerated start-ups have a far greater chance of success. …The rise in UK start-up programmes creates a unique opportunity for the entrepreneurs, but only if businesses and the Government take responsibility for investing in these programmes to ensure they offer long-term, quality support.”
Of those accelerator programmes that are able to quantify the number of start-ups still operating, they record a staggering survival rate of over 91%. However with only 1,100 start-ups being supported by 59 incubator and accelerator projects in UK, this represents only 0.1892% of the total number of Start-Ups that are created each year.
And also you will not be surprised to hear that the majority of incubator and accelerator programmes are based in London although the idea is slowly spreading to other parts of the UK.
But what help is there for the other 99.81% of Start-Ups? Theo Paphitis focuses on the business itself and feels that some of the failure of Start-Ups is preventable. “They haven’t done the research, they don’t know where to go for the right funding…they don’t do their homework”. You wouldn’t sit an exam without doing homework first and “a business is no different. It’s about knowing more than the next guy or girl and performing better, and the only way you can do that is through knowledge. It’s basic stuff but we don’t do it.”
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