Published by Gbaf News
Posted on August 29, 2016
9 min readLast updated: January 22, 2026
It has never been a better time to start a business in the UK, although money worries do persist for those going it alone, according to new research by award-winning cloud accounting software provider FreeAgent.
The majority of UK freelancers and micro-business owners are self-funding their start-up costs rather than relying on external financial support, according to the survey of more than 500 micro-businesses. Almost half (44 per cent) of respondents didn’t require any funding to get their business venture started, while 43 per cent had only used personal savings to do so.
With a record number of new business registrations in the past year, Government funded enterprise campaigns such as StartupBritain are helping small businesses to get up and running with little or no external investment.
Additionally, the research showed that just 4 per cent of micro-businesses said they had used a loan from a friend or family member to get their business idea off the ground, while as little as 2 per cent used their credit card or secured a bank loan, and only 1 per cent used Government assistance.
Whilst getting started does not seem to be the problem, the research did find that life can be more of a struggle once those businesses actually get off the ground – with 41 per cent of micro-businesses saying they did not make enough money to cover their costs, or “only just” made enough to cover them.
Many micro-business owners are also focussing their attention on their business at the expense of taking time off – nearly half of respondents (44 per cent) said that they had not felt in a position to be able to take a week or more of holiday during the last six months.
Ed Molyneux, CEO and co-founder of FreeAgent, who started his business in 2007, and has grown to more than 100 full time employees, said: “A major barrier for people thinking about starting a business can be the costs involved. They think they’ll need to spend a lot of money from the outset on building the right infrastructure for their business, and the idea of applying for bank loans, grants or other financial assistance is very unappealing.
“But the reality is that the majority of UK micro-businesses don’t actually require this kind of investment from the outset. We’ve found that most of them are either self-funded through the business owner’s personal savings or simply don’t have any start-up costs – and that’s a trend that should give confidence to anyone contemplating self-employment.
“However, it’s important to bear in mind that actually running your own business can still be a tough reality. Many people are only just making enough to cover their costs – or not covering them at all – and don’t even have the confidence to go on holiday.
“It’s in those areas in particular where we believe micro-business owners need help and support. By understanding their finances more clearly, we believe they will be better placed to spot new opportunities to improve their cash flow and gain enough confidence to take a well-deserved break from their business.”
Ed’s top tips for budding entrepreneurs when deciding to take the plunge are:
It has never been a better time to start a business in the UK, although money worries do persist for those going it alone, according to new research by award-winning cloud accounting software provider FreeAgent.
The majority of UK freelancers and micro-business owners are self-funding their start-up costs rather than relying on external financial support, according to the survey of more than 500 micro-businesses. Almost half (44 per cent) of respondents didn’t require any funding to get their business venture started, while 43 per cent had only used personal savings to do so.
With a record number of new business registrations in the past year, Government funded enterprise campaigns such as StartupBritain are helping small businesses to get up and running with little or no external investment.
Additionally, the research showed that just 4 per cent of micro-businesses said they had used a loan from a friend or family member to get their business idea off the ground, while as little as 2 per cent used their credit card or secured a bank loan, and only 1 per cent used Government assistance.
Whilst getting started does not seem to be the problem, the research did find that life can be more of a struggle once those businesses actually get off the ground – with 41 per cent of micro-businesses saying they did not make enough money to cover their costs, or “only just” made enough to cover them.
Many micro-business owners are also focussing their attention on their business at the expense of taking time off – nearly half of respondents (44 per cent) said that they had not felt in a position to be able to take a week or more of holiday during the last six months.
Ed Molyneux, CEO and co-founder of FreeAgent, who started his business in 2007, and has grown to more than 100 full time employees, said: “A major barrier for people thinking about starting a business can be the costs involved. They think they’ll need to spend a lot of money from the outset on building the right infrastructure for their business, and the idea of applying for bank loans, grants or other financial assistance is very unappealing.
“But the reality is that the majority of UK micro-businesses don’t actually require this kind of investment from the outset. We’ve found that most of them are either self-funded through the business owner’s personal savings or simply don’t have any start-up costs – and that’s a trend that should give confidence to anyone contemplating self-employment.
“However, it’s important to bear in mind that actually running your own business can still be a tough reality. Many people are only just making enough to cover their costs – or not covering them at all – and don’t even have the confidence to go on holiday.
“It’s in those areas in particular where we believe micro-business owners need help and support. By understanding their finances more clearly, we believe they will be better placed to spot new opportunities to improve their cash flow and gain enough confidence to take a well-deserved break from their business.”
Ed’s top tips for budding entrepreneurs when deciding to take the plunge are:
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