British entrepreneurs believe that the UK is a great place to start a business but a poor place to scale one, according to the fourth wave of The Entrepreneurs Network’s tracker survey of UK founders.
While nearly two-thirds (65%) of founders say the UK is an easy place to start a business, fewer than one in six (14%) agree that the UK is an easy place to scale.
More than four out of five (82%) take a negative view of the level of taxation in the UK, and over two-thirds (68%) are negative on regulation.
Asked what sends the strongest message that a country is serious about entrepreneurship, founders put tax levels and breaks at the top (68%), ahead of access to capital (60%) and simpler, clearer regulation (49%).
Three-quarters (74%) of founders say it is difficult to raise investment in the UK, while not a single respondent said it is ‘very easy’.
The survey also reveals a divide between how founders view their own prospects and the country’s prospects.
Nearly two-thirds (63%) are optimistic about the next 12 months for their own business. By contrast, almost three-quarters (73%) are pessimistic about the outlook for the UK economy.
The relationship between UK founders and Whitehall remains poor. Four out of five (79%) entrepreneurs disagree that the government understands the needs of entrepreneurs.
Some good news
Despite the pessimism, 43% of founders plan to increase headcount over the coming year and only 10% expect to cut jobs. Over a third (34%) expect to increase spending on research and development.
Asked whether they would actively encourage another founder to base themselves in the UK, 45% said they would. However, 25% said they would not, and 29% were unsure.
“Entrepreneurs don’t have confidence in the tax and regulatory systems, or in the government’s knowledge and understanding of what they actually do,” says Philip Salter, founder of The Entrepreneurs Network.
“This survey has also revealed there is room for improvement in the way the UK presents itself to the world as a place to do business. The encouraging news is that there is room for change. Entrepreneurs are telling us exactly where the problems lie – on capital, scaling and tax – and they are still hiring and investing in spite of it.”
Earlier this week, the UK government announced £500m in new funding to support innovative SMEs and scale ups grow, invest and create jobs across the country.
