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The Startup Report

In uncertain times, what's needed to succeed as a business owner — and what do the public think? Find out in our latest report

Introduction

If you run a micro-business or are self-employed, the past few years have been some of the most challenging for decades. The COVID-19 pandemic, for example, caused a drop in demand for many high-street businesses, and left millions of self-employed in need of support; while the current rise in inflation points to tough decisions ahead.

But starting up a business is about opportunity as well as risk. So what's required to strike out on your own — whether as a startup owner or self-employed? What makes people do it? And as a member of the public, would you ever take the plunge?

We spoke to both business owners and the UK public to find out. Our survey shows that the public is understanding of what it takes to be a business owner. Both entrepreneurs and the public agreed that hard work, motivation and organisation are the keys to business success.

But the differences are also telling. Business owners tend to give higher priority to time management skills (ranked 8th vs 13th), openness to change, confidence, and decision-making. Perhaps it's traits like these that mean, despite the challenges, business owners remain upbeat about the future.

Top 10 traits needed to be a business owner

View of business owners

  1. Hard working
  2. Motivated
  3. Organised
  4. Decision maker
  5. Confident
  6. Driven
  7. Resilient
  8. Good time management
  9. Passionate
  10. Open to change

View of the UK public

  1. Hard working
  2. Motivated
  3. Organised
  4. Driven
  5. Resilient
  6. Decision maker
  7. Confident
  8. Passionate
  9. Willing to take risk
  10. Budget-conscious

Reasons to start up in business: work-life balance comes top

When asked for three reasons why they set up their business, small business owners point above all to work-life balance (56%); with the ability to be in control (43%) in second place. So it's not necessarily money that business owners seek, but freedom and control to make decisions that are right for them.

It seems they have achieved these ambitions: when asked about the benefits of running your own business, both factors are in the top two spots. This could help explain why 76% of business owners agreed starting their own business was the “best decision they ever made” — compared to 5% who disagreed.

When it comes to the UK public as a whole, however, less than one-third surveyed (32%) say they have aspirations to be a small business owner or sole trade — and more than half (54%) say they have no such interest at all.

76% of business owners agreed starting their own business was the “best decision they ever made”

5% disagreed

Illustration of a calculator on top of a sheet of paper that has a performance graph on it

Starting up in business? Top pieces of advice from those who've been there

  1. Believe in yourself 60%
  2. Learn from your mistakes 59%
  3. Be ready to learn 52%
  4. Be patient 49%
  5. Care about your work 47%

Challenges of being your own boss: who will cover when you can't work?

When asked about the challenges of running their own business, entrepreneurs are most likely to cite the lack of cover when they have to take time off for illness or maternity / paternity leave (31%), with job security and doing your own admin also noted as concerns.

For the UK public as a whole, however, it's long work hours (32%) which they perceive to be the biggest challenges, before job security.

Despite the importance of financial security, just 26% of owners say they have business insurance. This figure is highest in the south-east (43%), dropping to only 9% in Northern Ireland and 8% in the north-east.

“At AXA, we recognise the all-consuming nature of going it alone and the right insurance policy will help business owners feel supported and have peace of mind, should the unplanned happen.”

Quote by Claudio Gienal Chief Executive Officer, AXA UK and Ireland

Top 3 challenges of owning a small business

Perception of business owners

  • 31% No one to hand over to for sick / maternity / paternity leave
  • 29% Job / financial security less than in a large company
  • 27% Having to do my own admin

Perception of UK public

  • 32% Long work hours
  • 30% Job security and financial security
  • 27% Not feeling able to take a break

Sources of support: banks play smaller role than public thinks

All business owners need support from others to get them through - whether financial or emotional.

However, while more than half of the UK public think small business owners mostly rely on bank loans for financial support (51%), this is only true for a minority of business owners (19%). Nearly half (49%) rely primarily on their own money only.

This figure, however, conceals stark age differences. Business owners are much more likely to rely on their own money as they get older, while 18–24s are most likely to rely on other sources whilst starting out.

Illustration of a man climbing a ladder to put money into a giant piggy bank

Sources that business owners are most likely to rely on (all ages)

  1. Own money 49%
  2. Family 22%
  3. Credit cards 20%

Sources that business owners are most likely to rely on (aged 18–24)

  1. Bank loans 63%
  2. Friends 61%
  3. Venture capital 59%

Emotional support: partners bear a burden

Starting up a business isn’t easy. There’s a lot of extra pressure from making the big decisions on your own. So, when it comes to seeking emotional support, business owners are most likely to turn to partners, family and friends. Relatively few use a mentor (12%), social media (14%) or other business owner (19%).

The public have a similar view of where business owners are likely to find support; again, putting partners, family and friends in the top three; though they think family (67%) is most likely to be the source of support.

Sources of emotional support

Business owner view

  1. Partner 44%
  2. Family 41%
  3. Friends 29%

UK public

  1. Family 67%
  2. Partner 56%
  3. Friends 49%

Inspiration begins at home

26% of business owners say they were most inspired by their family to start their business

When it comes to inspiration to start their business, business owners once again look close to home. Respondents say they were most inspired to do so by their family (26%), friends (20%) and other small business owners (18%).

On a more general level, however, business owners agree that they do feel inspired by other entrepreneurs; in fact, 60% are. And for those who say they are, it's Amstrad founder and The Apprentice host, Alan Sugar who tops the list — ahead of Elon Musk and Karen Brady.

For UK adults as a whole, though, the picture is different, with James Dyson in top spot.

Inspirational entrepreneurs

Business view - % of those who say they are inspired by other entrepreneurs

  • 27% say they are inspired by Alan Sugar
  • 25% say they are inspired by Elon Musk
  • 22% say they are inspired by Karren Brady

Public perception

  • 20% say they are inspired by James Dyson
  • 19% say they are inspired by Peter Jones
  • 19% say they are inspired by Alan Sugar

Public finds reason to support small businesses

The UK public recognises that small businesses have been through a hard time. More than half (52%) say they're more likely to support small businesses since the COVID-19 pandemic.

But this isn't just about sympathy: people tend to recognise that small businesses can offer advantages over large ones, especially at a local level. The top benefits offered by small businesses, as said by the UK public, are related to the kind of service they get — and links to the local community.

Illustration of a woman sat a nail salon having a manicure

Benefits of small businesses — the public's view

  1. They offer a more personal service 41%
  2. They create local jobs 37%
  3. The provide a unique offering on the high street 29%
  4. They care more about the local community 28%
  5. They provide a better level of service 26%

Opportunities ahead: businesses upbeat after COVID-19

17% average drop in turnover

The COVID-19 pandemic has had a significant effect on small businesses. Of those in business for at least two years, the average drop in turnover was 17% over the past 12 months — and only 17% of businesses saw an increase.

But despite an uncertain economy, 63% feel upbeat about their prospects; this figure is 50% or higher in all UK regions except Scotland. Young people, in particular, are optimistic, with 87% agreeing that they feel upbeat.

And despite being wary of inflation, fuel costs and weak domestic demand, businesses are hopeful about the return of former clients, the launch of new products, and the chance to expand.

“Despite ... economic uncertainty, I feel upbeat about the prospects of my business”

Average

  • 63% agree or strongly agree"

By age

  • 18-24 87% agree or strongly agree"
  • 25-34 60% agree or strongly agree"
  • 35-44 67% agree or strongly agree"
  • 45-45 51% agree or strongly agree"
  • 55-64 62% agree or strongly agree"
  • 65+ 67% agree or strongly agree"

By region

  • North East 75% agree or strongly agree"
  • Northern Ireland 73% agree or strongly agree"
  • London 71% agree or strongly agree"
  • South West 52% agree or strongly agree"
  • Yorkshire 50% agree or strongly agree"
  • Scotland 41% agree or strongly agree"

Launching your own business is a huge decision, one that requires courage, self-belief, and drive. Despite the challenges that face small businesses, the majority of those who have done it believe it’s one of the best decisions they've ever made.

While there are many perceived barriers to going out on your own, the rewards speak for themselves. It’s great to see so many business owners excited by the prospect of new and returning clients and the introduction of new products and services over the next three years. This ambition, even in the in the face of challenging times, shows both resilience and an amazing ability to adapt, which should be celebrated.

32% of Brits polled said they aspire to be a small business owner themselves but stress and not knowing where to start is what’s stopping them. At AXA UK, we recognise the all-consuming nature of going it alone but with the right support, advice and protection, the opportunities are endless.

That’s why we’re delighted to announce the return of the AXA Startup Angel competition. We’re giving six businesses the chance to win; including two top prizes of £25,000, invaluable mentorship from some of Britain's best entrepreneurs as well as 12-months of business insurance.

Quote by Claudio Gienal Chief Executive Officer, AXA UK and Ireland Read all the latest news to help you kick-start a successful business from Business Guardian Angel and AXA Business Insurance

AXA Startup Angel Competition 2022

AXA UK launched the AXA Startup Angel competition in 2021 to help give aspiring entrepreneurs the opportunity to turn their dreams into reality.

Now in its second year, we’re giving six businesses the chance to win; including two top prizes of £25,000, invaluable mentorship from some of Britain's best entrepreneurs as well as 12-months of business insurance.

Find out more about last year's winner: The Association of Black Event Professionals
Find out more about last year’s winner: EMBLDN

The four business founders tasked with judging the competition and providing mentorship will be:

  • Henry Firth Co-founder of vegan recipe brand BOSH!
  • Ian Theasby Co-founder of vegan recipe brand BOSH!
  • Raphael Sofoluke CEO and Founder of UK Black Business Show and UK Black Business Week
  • Sharmadean Reid MBE Founder and CEO of WAH Nails and The Stack World

Do you have a winning idea?