2013 has begun with a potential boost for Britain’s young entrepreneurs, with the coalition's start-up loans scheme extended, and the upper age limit now set at 30. We asked our 1,500-strong Facebook community whether the standard sum per start-up of around £2,500 is really enough to set up a successful business.
The government has announced that an increased total of over £110 million will now be available over three years, with budding businesses typically loaned £2,500 to help them get going, to be repaid at a relatively low rate of interest. Some have questioned whether this is a realistic amount for getting a business off the ground, but most of those who joined our conversation on Facebook told us that they had started their business with less, and that other non-financial factors are more important in making a new business successful.
Is £2,500 enough?
Beauty salon owner Grace told us that she had started with less than £2,500 capital, but is opening her second salon within six months of her first, and fellow entrepreneur Laura agreed; after starting with ‘nothing’ her success has given her the opportunity to start other businesses. Gas fitter John’s personal experience also made him confident that a big start-up pot isn’t essential, having begun his business with nothing more than a £700 van and his tools. A series of business owners added to our thread that they’d set their business up with ‘nothing’, or in the case of Derry, owner of a computer repair business, just a humble £10. The government believes that a new generation of entrepreneurial bright young things can help pull the country out of economic and employment malaise, and Tom seems to be a shining example, commenting that, after starting his business with £100 ‘I’m now turning over £5,000 a week and I’m not even 21’.
The non-financial essentials for business success
So if cash isn’t the key, what do you need to start a business and make it successful? The start-up loans programme isn’t just about money – business advice is also part of the scheme, which is being administered by several partner organisations including the Prince’s Trust. Partner organisation GLE oneLondon, for example, offers guidance on preparing a business plan, including weekly hour-long surgeries, and then provides free mentoring during the first six months for successful applicants.
Our Facebook fans were also opinionated when we asked whether drive and determination were more important factors for start-ups than money. Derry argued that determination and drive, coupled with a solid plan, are the most important ingredients adding that ‘the extra cash would be nice, but it’s not necessarily important’. Lynn agreed that while ‘drive, determination and hard work are essential, money isn’t.’ Malcolm added that ‘self confidence is the real key, along with a good idea and a willingness to work hard’.
Money can help, though…
The business owners that joined the discussion were also pragmatic, though – money helps, and a little bit of start-up capital is often important. Several comments suggested that it depended on the type of business you were starting, with property and equipment a possible outlay for some trades, and bookkeeper Victoria observing that the cost of professional memberships and certification are a must for some professions, plus computer equipment and software.
According to many business owners, there are more important things than money when you begin a business, and the value of intagible assets such as confidence and commitment should not be underestimated. The number of respondents who told us that they had started a business with nothing or near to nothing financially is an encouraging sign that success can grow out of little. However, the availability of loans and mentoring to young would-be entrepreneurs is bound to provide the support that many need to get started.
You can find more information about the scheme and apply for a Start-Up Loan here.