Recent findings published by the Bank of Scotland have shown a decrease in the number of businesses being started in November 2016 when compared to November 2011. This is a UK-wide decline, but there is one notable feature of the report: the rate of decline in the numbers of start-ups formed in Scotland is far less than the rest of the UK. The rest of the UK dropped by 19% as opposed to only 3% in Scotland. Why is this? And what is Scotland doing differently to the rest of the UK?
In order to find an answer to this question, let's consider some of the most common barriers to someone going out on their own and starting their own business:
- a lack of confidence/fear of failure;
- resources; and
Of course, the above is certainly not an exhaustive list and there are surely more creative excuses for not getting out there and Go Do'ing, but those listed are fairly understandable difficulties that would-be entrepreneurs may face. However, we know from our own experiences with clients that the entrepreneurial eco-system in Scotland is flourishing and these barriers to entry are being challenged in a number of ways:
Support available in the Scottish entrepreneurial ecosystem
Firstly, business accelerators such Entrepreneurial Spark (of which Harper Macleod is proud to be a Partner) have provided a free programme of enablement where entrepreneurs work with enablers and a community of other entrepreneurs to develop their business acumen and the skills and confidence needed to either start their great idea or, to scale-up and grow an already existing business.
The impact made by business accelerators to the confidence and development of entrepreneurs is without a doubt a key reason as to why Scotland has a higher proportion of start-up businesses than the rest of the UK.
As Entrepreneurial Spark continues to grow, it is likely that their impact in Scotland will begin to be reflected throughout the rest of the UK. Support is not only provided by business accelerators and other entrepreneurs, the likes of Scottish Enterprise and Highlands and Islands Enterprise play a vital role in opening up access to mentors, skills development, grant and other funding, as well as routes to market both domestically and internationally. Taken together, it is clear that confidence, education, training and resources are all catered for particularly well within Scotland.
New funding routes
Cash is the lifeblood of businesses and start-ups are no different. However, it can take a significant amount of money up front to get an idea off the ground or to develop an existing business further. Outside of traditional routes to funding, Scotland has embraced crowdfunding, with a number of high profile crowd funds completing in the last couple of years. Also, competitions like Scottish EDGE have opened up a whole new route to funding for Scottish entrepreneurs. With varying categories of the competition and a total prize fund of £1.3m awarded to the winners at the most recent awards held in December 2016, it is clear to see why so many businesses are turning to Scottish EDGE as a means to grow their business.
A generation of role models
Recent and highly publicised success stories such as FanDuel and Skyscanner will hopefully spur more people on to start their own business. With hard work, the resources discussed above and the fact that one-in-nine Scots anticipate starting their own company, the entrepreneurial eco-system in Scotland should continue to grow with Scots entrepreneurs confident about starting something of their own.