Section Menu

Business Creation

Supporting more businesses to start up and survive

Purpose

To increase the level of enterprise in the UK by supporting the creation of new businesses by enabling those with an interest in starting up in business to take the necessary steps to do so, particularly overcoming barriers faced by some individuals from under-represented groups and disadvantaged communities.

How will this be achieved?

By providing individuals and new businesses with relevant and timely advice and guidance for successful business start-up, on for example, compliance and regulatory information, business planning (appropriate to the complexity of the business), finance (including small grants and loans and financial skills), business idea development, market research and market understanding, managing and running a small business at start-up, and employing people. This will be provided by Business Link. More intensive support will be provided to the most disadvantaged individuals to overcome barriers to starting up.

Why offer public sector support?

The creation of dynamic businesses is a key driver of economic prosperity. The level of entrepreneurial activity in the UK, however, is modest in comparison to some other economies. Certain groups, including women, disabled people and some minority ethnic groups, as well as certain geographical areas have a disproportionately low level of entrepreneurship. If these disparities were overcome as well as increasing the overall rate of business creation then entrepreneurial levels could match those of our competitors.

The intervention is justified on equity grounds and government failure to provide enterprise education to some groups. In addition, people in some ethnic minority groups may not know where to seek the necessary information about how to start a business; they may not have the cultural or family history or networks to provide such information. For some groups in the population the transition from interest in starting up to running a business is made more difficult because of wider social and structural issues. The issues may become more entrenched without some suitable intervention.

There may also be information failures about the risks of starting a business among some women and certain ethnic minority groups which prevent some from these groups with an interest in starting up from doing so.

What will be offered?

Assistance will be given to individuals and new businesses comprising of a mix of generic advice and guidance that a business needs to be able to start trading concerning:

• business idea development, market research and market understanding,
• business planning, operations and management,
• financial planning and management,
• employing people.

More intensive support will also be available for some, including those from disadvantaged or under-represented groups. This will comprise:

• more personalised support from an adviser, coach or mentor who can work with the particular individual or business to overcome particular barriers to starting up;
• early stage support to ensure survival through mentoring or proactive account management, ongoing business review;
• limited financial assistance to disadvantaged individuals who face additional disproportionate costs when starting up.

Who is eligible?

Generic advice and guidance can be offered to all types of new business, including, for example, entering self employment and single person start-ups, team start-ups, high growth and high technology start ups, social enterprises start ups. The more intensive offer will be limited in availability to disadvantaged individuals.