If you’ve been dreaming about creating a business, but feel you lack the resources or confidence to make it happen, you’re not alone.
Together with The Entrepreneurs Network, Sage spoke to 705 people and 497 small-to-medium-sized enterprises (SMEs) in deprived areas of London and Newcastle about starting a small business.
The survey found untapped entrepreneurial potential in deprived communities, with 43% of respondents able to name an idea for a business or side hustle unprompted.
So, the question is: what’s really stopping people from giving it a try?
How to get money for a business
The greatest barrier to starting a business is money. Respondents in the Knocking Down Barriers survey believed they’d need over £10,000 to get started—an inaccessible amount for many.
Good news: you don’t even need half of that. Depending on industry, many fledgling businesses can be founded on just £1,000 initial capital.
A lack of confidence is the true issue, with 49% of respondents feeling they’d be rejected for a business loan. The majority (60%) believed they would need external financing, but only a third (34%) felt comfortable getting a loan.
But this isn’t the only route. The New Enterprise Allowance, for example, provides those on benefits with a weekly allowance (up to £1,274 total) across 26 weeks.
You could even try crowdfunding, where people contribute a small amount to back your project, usually in exchange for some sort of perk or early-bird offer. Kickstarter, for example, allows you to create different rewards for backers depending on how much they donate.
Tackling your taxes
Taxes and accounting are something to be aware of but shouldn’t stand in your way.
If you’ve already got a full-time job and run a side hustle alongside it, you still need to declare earnings to HMRC, and you may still need to pay tax and NI on it.
Top tip: Set aside 30% of what you earn each year to cover your tax contributions.
But if you earn less than £1,000 in a year from your side-hustle, then it’s effectively tax-free. You haven’t even got to let HMRC know. This is called the trading allowance.
What’s next for Britain’s budding entrepreneurs?
An impressive 73% of SME owners say they had access to a mentor and more than half have sought their advice. To help with that, Sage has teamed up with MyKindaFuture to provide training and mentorship to disadvantaged and underrepresented young people.
If you can tap into your ideas and ambitions for business, everybody wins. Your business will undoubtedly employ people locally as it expands, helping the wider community.