Start-Ups launch with less capital investment

New research has shown that it is now possible to successfully start your own business with less capital than ever before.

A nationwide survey, carried out by YouGov and sponsored by Microsoft, has revealed that nearly a third (32%) of entrepreneurs have less than £10,000 to successfully get their companies off the ground whilst another 8% have less than £20,000. 17% of respondents claimed that they started their businesses with no capital funding.

According to this research, over half of respondents (52%) who needed capital use personal savings to start their own businesses whilst 18% of this group turn to their bank manager for assistance. 14% depend on family and friends for loans whilst 5% re-mortgage their homes. However only 6% avail of grant funding.

This research highlights the financial challenges facing Small Business Owner Managers (SBOMs) when choosing what to invest in to ensure maximum benefit for the company. Technology, communications and physical infrastructure (i.e. office space including rent and furniture) were identified as the top three major purchases for the majority of firms.

The average spend on physical infrastructure was £17,624 whilst the average spend on communications (telephone costs including mobile and landline) was over £700. 67% of respondents who have invested in hardware and software have spent up to £2500.

Overall technology was identified as the purchase, which demonstrates greatest return on investment. 63% of SBOMs, who said that technology has had a positive effect on the company, believe that it increases productivity whilst 47% of this group believe that their technology has had a direct impact on profitability.