More than half of Scots would set up own business – but finance a concern

More than half of full-time staff in Scotland would consider setting up their own business – the highest percentage of all areas in the UK, a survey published today has found.

Nearly 60 per cent of full-time employees in Scotland would consider setting up their own venture. Picture: Getty Images/iStockphoto

The study by digital banking service Holvi and YouGov of more than 1,000 full-time workers, sole traders, freelancers and small business owners revealed that 58 per cent of full-time employees in Scotland would consider setting up their own venture.

The top reasons cited were to pursue a passion (43 per cent) or find a better work-life balance (39 per cent).

The figures compare with the 47 per cent of all full-time employees in the UK that would like to branch out on their own. However, 26 per cent of all full-time workers in Scotland said worries about dealing with business finances and losing money had stopped them in the past. The UK-wide figure was 32 per cent.

Antti-Jussi Suominen, boss of Holvi, which is focused on freelancers and sole traders, said: “There is a large number of people in the UK working full time for their employers who are considering taking the leap into self-employment. However, it’s clear that a fear of financial processes is holding them back. When you consider that sole traders are also ignoring their banks when it comes to seeking advice, it’s obvious that there’s something wrong here.

Support requirements

“Banks and other financial businesses need to make it easier for people to start their own businesses. It’s not about simply setting up a bank account, but also supporting them with the day-to-day aspects of business finance, including when their tax deadline is, what can be claimed on expenses, how to grow sustainably, and more. The status quo clearly isn’t working.

”Given the impact this section of the workforce have on the economy - and particularly in creating jobs - it is hugely important as much as possible is done to encourage venture creation.”

Meanwhile, a study from Mayfair-based private equity firm IW Capital said 21 per cent of respondents in Scotland are entrepreneurial but have never met an investor and wouldn’t know how to – rising to 28 per cent in Glasgow and 34 per cent in Edinburgh.

Additionally, 25 per cent people in Scotland know someone who has a good business idea or invention they feel could be successful – but are limited by a lack of funding – and the level was the same in both Glasgow and Edinburgh.

The study also found that only 5 per cent of those in Scotland are actively investing outside of London and in their local community - falling to 2 per cent in Edinburgh but rising to 8 per cent in Glasgow.

IW Capital chief executive and small business expert Luke Davis said: “London has, for a long time, been the centre of the financial universe and, while it continues to be full of opportunity and optimism, investors are realising the potential of other areas.

"State-sponsored initiatives and infrastructure investment will give businesses confidence but the majority of funding is likely to come from private sources. And given that bank lending to [small and medium-sized enterprises] remains a key issue limiting growth, private equity through schemes such as the [Enterprise Investment Scheme] will be crucial to unlocking the growth potential of these firms.”