London businesses worried about surviving – London Business News | Londonlovesbusiness.com

Following months of political upheaval, British business founders are feeling the pressure.

New research today shows a worrying half (50%) of small business owners are concerned their business might not survive the next 12 months.

By comparison, only 11% of founders felt the same way in November 2023, a stark reminder for the new government that Britain’s founders need better support.

The figures released today by not-for-profit Virgin StartUp, as part of its ‘Founder Barometer’ report, show that fewer business founders are confident their business will be in a stronger financial position in six months’ time, decreasing from 66% in November 2023 to 45% today.

The report reveals that business owners are calling on the new government to better support SMEs by scrapping business rates (33%), increasing support for local regions outside of London (32%), cutting corporation tax (26%) and raising the VAT threshold (24%).

This comes as the cost-of-living crisis is a bigger concern than ever, with more than half (52%) of founders admitting this is their biggest concern, a huge increase of 23% in comparison to last autumn’s total. Nearly a third (30%) of respondents have acknowledged their mental health has worsened in the past six months. These mounting pressures mean support is needed more than ever for entrepreneurs in the UK.

Andy Fishburn, Managing Director at Virgin StartUp said, “It’s evident that many founders are feeling financial and emotional uncertainty and need support now more than ever.

“SMEs support 27 million jobs across the nation and collectively account for £4.5 trillion in annual turnover in the UK. The new government must recognise the significance of each and every founder in supporting the economic health of our nation, and recognise the mounting pressures heaped on UK founders in this day and age.”

It’s not all doom and gloom. Nearly three-quarters (70%) of business founders responding to the study said they are looking to expand in the next six months, with more than a third (37%) planning to increase their products or services and 22% planning to raise new funds or investment.

The research also indicates that owning your own business need no longer be a lonely endeavour, with founders increasingly building a network of support from other founders in-person and online.  One in five (20%) founders now get their most valuable advice from online communities or social media and are using these communities for moral support (20%), expert knowledge (17%) and creative advice (13%).

Support from family (53%) and friends (46%) are also the top two factors helping business owners’ mental health.

This latest ‘Founder Barometer’ study marks the launch of Virgin StartUp’s new Community – a social networking site where founders can connect with each other and access 1-1 mentoring, online courses and tailored advice from experienced entrepreneurs in the industry.

Matthew Ridd, Co-Founder of start-up, Wuva, a circular rental marketplace for bikes and prams, said, “Being able to access a community of other business founders and experienced business mentors has been invaluable to Wuva and it has propelled our growth.

“We’ve listened to different perspectives, taken on board new ideas, and heard how other founders have navigated challenges along the way. It has meant starting a business hasn’t been as daunting as we’ve been able to tap into support every step of the way.”

The Barometer report also shows that British entrepreneurs are leading the way when it comes to using AI technology. Nearly half (46%) of founders  are hopeful AI will have a positive impact on their business in the next 12 months and double the number of founders are expecting to fully adopt AI by 2025.

Business owners say adopting AI will help them save time (37%), increase creativity (27%) and reduce administration tasks (21%). AI might also give founders more time to think about the bigger picture, given that business owners say they are most likely to come up with ‘eureka moments’ when on holiday (25%), when scrolling online (22%) and in the bath or shower (21%).