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UK entrepreneurs finding growth, but concerns surround no deal

10 Oct 2019

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Start-up founders are defying the economic gloom, a new survey from the Institute of Directors reveals today. The poll of almost a thousand members of the IoD’s start-up community showed that the majority had managed to grow over the past year, with 13 per cent at least doubling their turnover, but also found concerns about the potential for a disorderly Brexit at the end of the month.

Half of the entrepreneurs questioned thought no deal would be negative for their organisation, against only 10% who judged it would be positive. Company founders were also twice as likely to find the prospect of no deal more worrying than a further extension. Brexit was generally considered more of a threat than an opportunity, though many felt it was both, while survey respondents were in favour of maintaining a close economic relationship with the EU in future.

Findings include:

  • 59 per cent of respondents had seen turnover increase over the past year.
  • After UK economic conditions, Brexit concerns were the top factor having a negative impact on respondents’ organisations (37 per cent), ahead of business taxation (23 per cent) and global economic conditions (20 per cent).
  • 34 per cent felt Brexit was more of a threat than an opportunity to their business, while 15 per cent felt the opposite; 39 per cent felt it was both.
  • 55 per cent felt staying in the Single Market would be better for their organisation compared with 13 per cent who thought leaving would be more beneficial.

Commenting on the figures, Edwin Morgan, Director of Policy at the Institute of Directors, said:

“Entrepreneurs are built to buck the trend. It’s heartening to see that many start-up founders have been able to grow their organisations and prosper despite the wider political and economic upheaval, and despite the inherent challenges of starting a new venture at any time.

“The UK is a hotbed of entrepreneurial activity, helped by easy access to European markets, talent, and investment. Many company founders are understandably nervous that this could be undermined, and the prospect of a disorderly Brexit has caused disquiet within the start-up community. This makes it absolutely vital that politicians in the UK and EU redouble their efforts to find a deal, despite their differences.

“It’s often said that entrepreneurs thrive on change, and in many respects they are great disrupters of existing companies and markets. Start-ups, however, want to spend more time on creating great new products and services, and less on dealing with political uncertainty. Making sure the process of Brexit is as smooth as possible is the best thing governments, both here and in the EU, can do to promote the entrepreneurial spirit that creates dynamic economies.”

Full survey results:

972 respondents from the IoD’s community for early stage company founders (<5 years), conducted between 31 July - 11 September 2019.

Compared with the previous 12 months, by approximately how much has your annual turnover increased?

10%

10%

20%

9%

30%

8%

40%

4%

50%

6%

60%

3%

70%

2%

80%

2%

90%

2%

100% and above

13%

No change

23%

Turnover has decreased

10%

Don't know

9%


Thinking with the interests of your (primary) organisation in mind, what assessment do you make of Brexit generally?

I consider it to be more of an opportunity for my organisation

15%

I consider it to be more of a risk/threat for my organisation

34%

I consider it to be both an opportunity and a risk/threat for my organisation

39%

Don't know

12%


Which of the following would you consider to be more negative for your (primary) organisation?

A no-deal Brexit on October 31st this year

48%

An extension/further extension beyond October 31st

22%

Neither would be negative for my organisation

16%

Don't know

14%


Do you consider leaving the EU without a deal in place on 31 October 2019 would be positive or negative to your (primary) organisation and the UK economy as a whole?

Very positive

Positive

Neither positive nor negative

Negative

Very negative

Don't know

Your organisation

3%

7%

27%

27%

23%

12%

UK economy

3%

8%

10%

23%

45%

10%


Which of the following factors, if any, are having a negative impact on your (primary) organisation?

UK economic conditions

48%

Concern over Brexit

37%

Business taxes

23%

Global economic conditions

20%

Skills shortages/employee skills gaps

17%

Difficulty or delays obtaining payment from customers

16%

Access to, or cost of, finance

16%

Compliance with Government regulation

12%

Broadband cost/speed/reliability

10%

Transport cost/speed/reliability

9%

Employment taxes

9%

Cost of energy

2%

Don't know

4%

Other (please specify)

3%

None of the above

11%


Assuming the UK leaves the EU, what would be in the interests of your (primary) organisation?

Leaving the Single Market (regaining full control over UK regulation of goods and services, but with notably reduced ease of access to the EU market)

13%

Staying in the Single Market (similar to Norway - UK continues to follow EU rules for goods and services with reduced ability to influence the rules but retain our full continued access to the EU market + free movement)

55%

No preference

22%

Don't know

11%

IOD_Brexit

Contact Press Office

Euan Holmes, Press Officer

020 7451 3280


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