Northern entrepreneurs believe that access to finance is the biggest barrier to setting up a new company, according to the results of an EY survey.
Fifty-five per cent of respondents cited funding as a key hurdle to launching a business, followed by fear of failure (53 per cent) and uncertainty of income (37 per cent).
In contrast, only 6 per cent of respondents thought that bad market conditions could hold back entrepreneurs, while just 10 per cent cited the possibility of going bankrupt as a barrier to starting a business.
EY surveyed over 50 Northern entrepreneurs to gather their views on the factors they feel can help or hinder growth. Nearly all of the entrepreneurs surveyed have well-established businesses; 81 per cent of respondents have run their companies for at least a decade.
Stuart Watson, EY’s Yorkshire and Humberside senior partner and Entrepreneur of The Year UK Leader, said: “Matching funding to business growth plans remains a key area of concern for ambitious entrepreneurs, not least as rapid growth tends to absorb cash.
“Business leaders that develop controls over cash and cash forecasting as they grow are able to plan early for fund raising and are more likely to attract investors.”
Thirty-seven per cent f Northern entrepreneurs – the highest percentage of all UK regions – said that using their retained profit to grow their businesses would be the most attractive route if they were considering secondary funding sources.
Just over a fifth said that they would look to bank funding (22 per cent), while 12 per cent would consider private equity investment.
Mr Watson added: “There are a wide variety of options for funding growth. However, these are often complex and take time to review, and, those that can, would prefer to use retained profit – as illustrated by our survey.
“While there have been many initiatives around access to finance at a policy level, the responses from our survey suggest that politicians should focus on how to encourage greater investment in the fast growth companies in the economy.”