Success of young entrepreneurs boosted by older directors
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The number of young entrepreneurs starting up their own business has increased by nearly a quarter (22%) in the past three years, according to research by information services company Experian.
However, 45% these businesses are wound up within two and a half years, although when a director aged over 26 is also on the board, this rate improves significantly.
The analysis also highlights that young directors are 57% more likely to start up a business in sectors defined as ‘vulnerable’ by Experian, such as construction, retail and hotel or catering, than those sectors defined as ‘resilient’.
Simon Streat, managing director of Experian’s UK SME business, says: “With young directors often lacking the experience, capital and contacts needed to survive those first few tricky years, our research shows that they shouldn’t underestimate the value in partnering with an older director.”
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Readers' comments (1)
David Saul | Mon, 28 Nov 2011 6:10 pm
It’s encouraging to see a rise in the number of entrepreneurs setting up their own business in what’s an extremely tough climate. But what’s disappointing is that although they have the gumption to start a business – most have failed within three years of doing so.
Surely it is a red flag not just to the government, but to other organisations and businesses to do something to support start-ups and ensure their survival?
As the MD of a serviced office provider, one of the major challenges entrepreneurs voice with me is securing cheap property from which to operate. Too many initial deposits and overheads mean that they struggle to finance a business address – and this can be key when branching out and taking on new staff. Cheap properties with no fixed term contracts are an absolute must for start-ups –enabling them to relax and get on with running a successful business.
I hope that more businesses can reach out to start-ups and tailor their services to ensure they find the right kind of environment where they can blossom and grow.
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