Key Barriers to Business Start Ups and Growth

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ENTREPRENEURSHIP AND LEADERSHIP ASSIGNMENT ONE STUDENT: 171666 INTRODUCTION “The key barrier for start-up businesses to succeed and grow is their inability to raise finance to fund their enterprise”. This assignment will define start-up businesses, identify key barriers faced by start-up businesses and critically appraise the above statement. A start-up business is a relatively new business in the initial stages of operation. Eric Ries describes the concept of start-ups in his book ‘The Lean Startup’ as…a human institution designed to create new products and services under conditions of extreme uncertainty (Ries E, 2011. Pg 8). However, not all new businesses begin as a start-up, some businesses split off from larger businesses, whilst others begin when two smaller businesses merge into one larger business. As start-ups are in the early stages they represent the greatest potential for growth but they also lack resources to promote stability or rapid expansion at first. According to the Federation of Small Businesses (FSB)…at the start of 2012 * SME’s (Small and Medium sized enterprises) accounted for 99.9 per cent of all private sector businesses in the UK * SME’s employed 14.1 million people and had a combined turnover of £1,500 billion * Small businesses alone accounted for 47 per cent of private sector employment and 34.4 per cent of turnover. (Federation of Small Business, 2012) The success or failure of these SME’s is often dependent on overcoming a series of barriers including access to finance, business know-how and access to technical support, access to premises and facilities, confidence and support network issues. FINANCIAL BARRIERS According to a survey by Bloomsbury Professional, seven out of ten accountants believe that lack of finance is the main reason why start-ups are failing

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