Confidence crisis – over half a million business ventures go unpursued in the UK
Nearly two thirds (65%) of UK small business leaders have not pursued a potential business venture because of a lack of confidence, new research by YouGov on behalf of the British Business Bank reveals. This crisis of confidence is costing the UK over half a million potential business ventures that are not pursued*.
A lack of confidence remains a major barrier to entrepreneurship. More than four in 10 (41%) small business leaders say a lack of self-belief was one of the biggest barriers to starting or growing their business. For more than a third (36%), fear of failure holds them back more than a lack of funding.
Young entrepreneurs are feeling the strain most acutely. Nearly a quarter (23%) of the 18–34-year-old cohort ‘strongly agree’ with the statement ‘I sometimes feel I’m not the ‘right kind of person’ to run a business, against only 2% of over 55s strongly agreeing.
More than a third (37%) of small business leaders have delayed launching their business due to lack of confidence, rising sharply to 57% among 18-34s.
The impact isn’t merely on potential – it’s also affecting business growth as almost four in 10 (38%) leaders have either delayed pitching to clients, or not pitched at all, due to confidence issues. The youngest are, again, those where the impact is most profound with the figure rising to 57% among 18-34s.
Business expansion plans are also being impacted, with 38% of all those surveyed having delayed or decided not to expand or scale their business due to their lack of belief.
One East of England business owner who has overcome self-doubt is Saul Press, founder of The Beer Hatch. He has used two Start Up Loans of £1,500 and £6,000 to set up his craft beer company. During the pandemic, Saul found himself out of work and decided to take out his first loan to set up a beer delivery company. He delivered the beer orders on his bike, selling excess draught beer that breweries were struggling to sell due to lockdowns.
As the lockdown restrictions subsided, Saul opened the ‘UK’s smallest off-license’ – selling beer from a disused telephone box in Norwich. Due to the success of the pop-up shop, Saul used a second Start Up Loan to open his own craft beer shop in the centre of Norwich in 2023 with support from one of the Start Up Loans programme’s Business Support Partners, First Enterprise, to expand his craft beer company. The loan helped purchase six draught taps to open a small bar, and fridges to retail local beers.
Saul said, “Finding myself out of work during lockdown as a new parent was a challenge. I had a ‘lightbulb moment’ when I realised that if I channelled the massive amount of mental energy and time I was spending applying for jobs into my own venture, it had to work. The deciding factor was a simple risk assessment: if it didn’t work, I’d just be back where I started.
“When things get high-pressure, I lean on my track record. Whether you’ve worked behind a bar or in a corporate bank, you’ve developed skills that are transferable. When it’s your business, you are the one held accountable, and while that sounds heavy, it’s actually empowering. You aren’t just a cog in a machine, you’re the architect. So, I stay confident by remembering my ‘why’ – I would much rather pour my energy into my own legacy than someone else’s.”
Louise McCoy, managing director of Start Up Loans Products, British Business Bank: “At Start Up Loans, we believe in the power of ideas and the people behind them. Confidence should never be a barrier to pursuing your dreams. We’re encouraging entrepreneurs to back themselves – and we support them with developing a pre-application business plan and post-application mentoring.
“Like in other walks of life, new business owners are often affected by imposter syndrome. This is why we connect Start Up Loans recipients with mentors and provide other post loan support.”