Business myths shattered

The degree of risk felt by those thinking of starting their own business is wrongly inflated, deterring some people from taking the next step.

That’s the findings of new research from the DTI that has found that a myth widespread among the public is that most small businesses fail within the first year. In fact, contrary to what many people think, over 80 per cent of new businesses survive their first year of trading.

Other myths shattered in this latest study include:

MYTH: it takes years to start a business from scratch.
FACT: most businesses are established within six months.

MYTH: the rejection figure for business loan applications is significantly higher than it is.
FACT: Overall, only 10-20 per cent of applications are rejected.

MYTH: it is difficult to make an adequate living from a start-up.
FACT: peoples’ estimate of income in their first year of trading is only half of the figure actually achieved by small businesses.

Says DTI Minister for Competitiveness, Barry Gardiner: “Prior to entering Parliament, I too started and ran a business. Before making the first step I - like others - was faced with potential concerns. Many of these turned out to be misplaced and I am glad I made that leap into business. I want many others to do the same.

“There are now a record 4.3 million small businesses in the UK - this is over 500,000 more than seven years ago. Small businesses and start-ups make a major contribution to the health of the economy, increasing jobs, productivity and prosperity. It is therefore essential that the myths surrounding starting up a new business are dispelled.”