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Press Room

Entrepreneurs Crave Independence and to be in Control

(23rd July 2007)

A strong desire to be in control of their own destiny plus the all important ability to spot a good market opportunity is driving forward the nation’s entrepreneurial spirit and flair according to the inaugural NatWest and RBS Small Business Monitor.

The brand new survey, launched today, reports that three very distinct factors stand out as the key motivators for would-be entrepreneurs deciding to start up a new enterprise. Top of the list is the desire to gain more control over their lives and avoid being told what to do, which was cited by 17% of respondents. This figure was much higher (29%) for owners of small enterprises less than two years old. Interestingly, the desire to make critical business decisions as the boss far outweighs the aspiration to make money by almost three to one.

In second place, and testament to Britain’s long accepted entrepreneurial spirit, 16% report that they set up their own business because they had spotted a market opportunity which they were ready to exploit. Just as important, 15% were motivated to set up because of the working experience and knowledge already gained from previously working in that particular business sector.

Encouragingly, starting up a small enterprise still appears to be very much a vocation of choice as less than one in ten respondents set up their business because they had been made redundant and only 2% because they found it difficult to gain suitable employment.

Steve Pateman, Chief Executive of NatWest and RBS Business Banking, said: “There is a terrific amount of drive and ambition within Britain’s small business sector and, very encouragingly, from concept to set up, entrepreneurs are firmly putting their destiny in their own hands which should be applauded.

“Small enterprises are the lifeblood of this country and we should all be doing our bit to help and nurture them.”

Although only 6% of small business owners said they started their venture to make money, once up and running, over a quarter say that increasing profits is their main objective, with 14% saying that their aim is to expand into new markets and 11% wanting to build their reputation.

For many entrepreneurs, to support a certain standard of living is key with more than one in four reporting that they are happy with their business as it stands. This is especially true among the more established firms with businesses more than 10 years old (33%) compared to 14% of enterprises less than two years old.

And just how do these entrepreneurs rate their prospects over the next year? Well, they paint a very optimistic picture with reports of growth in sales, profits and jobs. Following a difficult year in which higher energy bills and other input costs took their toll, 49% of small businesses are saying that their turnover will rise with 32% expecting their profit margins to increase. With regards to jobs, the outlook is considerably more positive than it has been over the past 12 months with 17% of small firms reporting that they will increase employment, though markedly faster among larger businesses.

Early indications also show that there is little out there able to dampen this optimism, in spite of the fact that the research took place against a backdrop of rising interest rates, less than 1% of businesses expressed concern about these increases.

Notes to Editors:

  • This marks the launch of the NatWest and RBS Small Business Monitor which will be produced twice a year
  • The Monitor is based on interviews with 1,400 small firms across Britain. These are firms with annual sales of under 1 million
  • The interviews were conducted by telephone for NatWest and RBS by IFF Research, a specialist market research company during May 2007.