The average Brit estimates that starting a business costs around £34,000, according to research earlier this year from American Express and think tank, The Entrepreneurs Network. In reality, it’s much less than that – a separate study estimates it only requires, on average, £5,000 to get a business off the ground. This difference – nearly a 600% overestimation – reveals a gap in public knowledge which is potentially a reason holding back would-be entrepreneurs from taking the leap to set up on their own.

Addressing and dispelling this myth is not only key to encouraging more people to start their own businesses, but to strengthening the UK economy as a result. To close this expectation gap, Ruchi Sharma, Vice President, Commercial, at American Express explains why those invested in a thriving entrepreneurial environment, from policymakers to the business community, need to address the “three Rs”.

Recognising the importance of entrepreneurs

Entrepreneurs play a vital role in driving innovation, societal progress and economic growth, yet their efforts often go under-recognised. According to the research, over two fifths (42%) of the public believe that entrepreneurs do not receive the recognition they deserve, a sentiment felt more strongly by entrepreneurs themselves (77%). However, despite this perceived lack of recognition, 86% of the general public do acknowledge the vital role that entrepreneurs play in the UK economy.

To better support entrepreneurs, it’s important to celebrate and shed a light on the great work they do. The annual Small Business Saturday campaign, of which Amex remains principal supporter, is a great example of this in action – encouraging consumers support these independent businesses and highlighting the significant contributions they make to their communities and the economy.

Reducing barriers to starting a business

The research also sheds light on the challenges preventing potential business founders from embarking on their entrepreneurial journey. The biggest barrier is a lack of funding, cited by just over a quarter (27%) of those wanting to start a business. One in five (20%) say they are being held back due to a reluctance to take risks.

Our research suggests that breaking down some of these barriers would encourage more would-be entrepreneurs to start up. A range of factors such as targeted financial support, mentorship schemes, and accessible resources would help demystify the start-up process for aspiring founders.

Spotlighting role models

Beyond offering practical support, the research shows a strong correlation between early exposure to entrepreneurshipand the likelihood of starting a business later in life. Seven in 10 (71%) entrepreneurs knew someone during their childhood who had started a business, with 85% of respondents believing this experience had a positive impact on their perception of entrepreneurship.

Clearly, current business owners act as important role models to would-be entrepreneurs. However, the data shows that only 10% of the general public looked up to business leaders in their school years, compared to the 34% and 31% that looked up to parents and teachers, respectively. It’s clear that spotlighting positive business role models to demonstrate that entrepreneurship is a viable and possible career path can help address this.

Entrepreneurs are drivers of innovation, job creation, and economic growth in the UK. However, a key theme to emerge from our research is that there is a huge untapped potential among those who might potentially take the leap.

At American Express, we’re proud to back the individuals driving their businesses forward. We support entrepreneurs at all stages of their journey, from founders to those scaling up, or looking to expand, through a range of payment and financing solutions that underpins growth and rewards them for their spending.

By better understanding the DNA of the UK’s entrepreneurial community, we can empower industry, policymakers and the wider public to better support and recognise this vital part of the UK economy.

American Express and The Entrepreneurs Network commissioned Opinium Research to survey 250 UK business owners and 1,541 UK adults. The business owner research was conducted 2 – 9 November 2023. The research among UK adults was conducted between 3 – 7 November 2023.

Our research suggests that breaking down some of these barriers would encourage more would-be entrepreneurs to start up. A range of factors such as targeted financial support, mentorship schemes, and accessible resources would help demystify the start-up process for aspiring founders.