Students undeterred by the prospect of launching a business post Covid
New research from Santander UK reveals that over a quarter of students (27%) currently run or plan to run a business whilst at university.
The study – which polled 1,000 undergraduates from across the UK – found that almost one in ten (9%) entrepreneurs are already running a business alongside their studies, an increase from just 6% recorded in 2018 , with an additional 18% of students saying they have plans to start their own business venture in the near future.
Santander, through Santander Universities, found that amongst the budding student entrepreneurs who have already launched a business, the average turnover is £411.67 a month – almost £5,000 a year or almost £15,000 in total over the course of a three-year degree.
Student entrepreneurs are also striving for significant growth, with those running their own businesses expecting average turnover to have grown by 42% in five years’ time.
Arts and crafts (25%) and technology-based solutions (16%) are the most common type of student venture as many expanded on a hobby they already had. These are followed by administration or business services (10%), clothing and textiles (8%) and tutoring and teaching (8%).
Matt Hutnell, director of Santander Universities UK, said: “It’s fantastic to see that so many university students are starting or looking to start their own business during their university years. From app-creation to pivoting businesses to support communities in response to the coronavirus outbreak, we are constantly impressed with the ambition and talent demonstrated by young entrepreneurs as they continue to play a vital role in the future of the UK economy.
“Starting off in the world of work can be a daunting experience for graduates, but even more so in the current environment, so it’s great to see students are looking at ways to best make it work for them.”
Santander’s research also reveals that a key influence or motivation for students to run their own businesses was a desire to pursue a hobby or personal interest (33%). Family (34%) and friends (21%) also influenced or motivated students to become entrepreneurs while just 16% said they had set up their own business due to a lack of money and one in ten (10%) to be their own boss.
However, despite the growing number of student entrepreneurs, almost two thirds (64%) didn’t think there was enough support for undergraduates looking to start a new venture, with more than a third turning to their parents for help (35%). Of those looking to start a business in the future, over a quarter (28%) would turn to their university or college for start-up advice in order to get their business up and running and a fifth (22%) would get support from a bank or financial adviser.
Despite being able to turn to others for some support, Santander found that the biggest barrier to starting a business was a lack of funds to set it up, with over three-quarters (76%) of students citing this as a reason. Almost half (45%) said the biggest barrier were concerns around having no regular income, while four in ten (40%) pointed to the large risk involved and the fear of the consequences of the business failing.
Post-graduation entrepreneurship
The study found that when asked about the future of their businesses post-university, almost a fifth – 17% – expect to continue with it as a full-time career once they leave university. Almost half – 48% – said they plan to continue the business as a second job or hobby post-graduation. Just 6% said they expect the business to cease trading.
Future careers
The research also found that in the wake of the Covid-19 pandemic, more than four in ten (43%) university students are rethinking their careers, as over three quarters of students – 78% – fear Covid-19 will impact their job opportunities once they graduate.
The study suggests this may have had a knock-on effect on the view of their career prospects, with over half of students – 55% – admitting they have a ‘plan B’ in case their top career choice does not work out, with six in ten – 60% – looking to work in roles which have a clear sense of purpose and means they can “make a difference.”
Despite the events of 2020, there is some optimism, with a quarter (24%) of undergraduates saying they are not worried about the impact it will have on their life and almost one in ten (8%) still optimistic about the future.
There are also signs of hope for the future pipeline of budding entrepreneurs, with the research highlighting that while many students agree it might be a riskier prospect than usual, a third (33%) still want to start their own business post pandemic, while another one in ten (11%) will look to start their own business post the Covid-19 pandemic, believing it to be no more of a risk than before.
Santander Universities Emerging Entrepreneurs Programme and Awards
The research was commissioned by Santander Universities to support the new Santander Universities Emerging Entrepreneurs 2020 programme. The new virtual programme of panel discussions and workshops, coaching and peer-to-peer learning, which runs until the end of September, has been designed to provide support, expertise, and resources to 83 budding university entrepreneurs who are looking to grow or scale their business. The programme also focuses on responding to key challenges and goals for start-ups during the current coronavirus crisis.
Now in its tenth year, the Santander Universities Entrepreneurship Awards support and encourage university students and recent graduates to pursue their business ideas by rewarding the best with cash prizes, mentoring and start-up support. All participants in the Emerging Entrepreneurs programme will have a chance of winning £30,000 of equity-free seed funding and a fully funded eight-week internship at the live virtual final of the pitching competition on 29 September.
Matt Hutnell, director of Santander Universities UK, added: “Santander is committed to fostering entrepreneurship in the UK and we’re excited about this year’s crop of budding business stars taking part in the Emerging Entrepreneurs programme.”
Since the competition launched a decade ago, Santander Universities has awarded more than £500,000 in support of student start-ups and given universities the chance to showcase entrepreneurial talent from across the UK. Overall, Santander Universities has provided over £2.5m of funding each year to support entrepreneurship at its 85 UK university partners.
