New Year plea to get 500,000 more Brits to become their own boss

Half a million new entrepreneurs are needed to stimulate UK economic growth and create jobs, according to research published today.

The Federation of Small Businesses (FSB) is calling on the Labour government to set a target of supporting and encouraging 500,000 more small businesses to exist by January 2028, starting this new year. It argues that this would take the small business community back to its pre-pandemic size of six million.

FSB’s analysis outlines a package of “targeted” measures to achieve its goal, arguing that this would not only stimulate economic growth and jobs, but also improve equality of opportunities and social mobility. This includes changes to the benefits system to increase the number of people moving from unemployment to self-employment, in-turn reducing the benefits bill longer-term.

The FSB said entrepreneurship provides many people with a path to financial freedom and independence.

The research also found that the top three reasons for being your own boss among those who have taken that step or are planning to are independence at work, followed by a better work/life balance, and thirdly creating wealth for the individual and their family. The attraction of self-employment as a way of balancing work, personal and/or family life is even more prevalent among those who have been on benefits.

The FSB noted that barriers remain which, if addressed, could unleash “much-needed new and dynamic entrepreneurship”, and in turn grow local economies in communities across the UK. More than a quarter (28 per cent) of sole traders say reform of universal credit would support them to start and/or grow their business.

Tina McKenzie, FSB’s policy chair, said: “Entrepreneurship provides many with a path to financial freedom and independence. For some, it’s a long-held dream; for others it comes after an unexpected career shift or change in life circumstances.

“As our new research shows, the main motivation for wanting to be your own boss is often not primarily about making money beyond a liveable income; it’s about the freedom it gives in terms of fitting in with life, health or family circumstances - and provides a fantastic way to unlock opportunity and talent, and improve lives.

“Replenishing the small business community to its pre-pandemic size of six million is also a no-brainer for the economy, which is why the government should commit to a target of 500,000 more small businesses existing by 2028 - and follow our evidence-based recommendations to achieve that.”

Almost a quarter (23 per cent) of women aged 45 and under say better access to the maternity allowance would improve their ability to start or grow their business. The value of maternity allowance is significantly lower than that of statutory maternity pay and the FSB is calling for these to be brought closer into line.

The business body is also calling on the Department for Business and Trade to set a target of 250,000 more disabled entrepreneurs by 2030, and a target for 50 per cent of self-employed individuals to be women by 2035, up from the current level of 37 per cent.

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