35% of UK Businesses Fail Within Three Years
The path to success in entrepreneurship is riddled with potential setbacks and failure. According to the Office for National Statistics, 40% of all new businesses in the UK will have closed after three years. The fear of failure is a major inhibiting factor for individuals considering starting a new business. The most recent Global Entrepreneurship Monitor revealed that 58% of the UK working-age population not engaged in entrepreneurship stated that fear of failure would prevent them from starting a business, despite recognizing good start-up opportunities.
Resilience and Lessons from Failure
Despite the high rate of failure, the Ambitious UK Start-Ups Report, sponsored by Starling Bank, found that 24% of those starting new ventures had experienced business failure in the past, indicating that failure is becoming less of a deterrent. For entrepreneurs who don’t succeed the first time, failure provides valuable insights and serves as a powerful educational tool, giving them a better understanding of potential pitfalls and equipping them with better risk assessment skills for future endeavors.
The report also sheds light on key reasons for failure among new businesses. Cash flow issues, lack of funding, bad planning, and a lack of customers emerge as the top factors contributing to business closures, highlighting the need for better financial management, effective planning, and a focus on customer acquisition and retention.
While failure has traditionally been stigmatized and feared in the UK, there is evidence to suggest that entrepreneurs are starting new businesses after closing previous ventures, signaling a reduction in the “fear culture” that often prevents failed entrepreneurs from embarking on another start-up journey.
Exclusive Insights into Ambitious start-ups
The Ambitious UK Start-Ups Report unveils the stories of start-up founders from across all parts of the UK and all sectors of the economy. Explore data collected directly from the UK StartUp Awards to gain exclusive insight into these ambitious start-up founders, their businesses, the ecosystems in which they operate, and their needs for the future.