A Third of Workers would use Redundancy to Start a Business
on: July 7, 2009, 7:52 am
Industry: Small Business
Britain could be about to see a boom in new business start-ups
as redundancy rates grow, according to uSwitchforBusiness.com, the
dedicated SME comparison and switching service. New research shows that
almost a third (31%) of workers would start their own business if made
redundant in the near future. But this number could grow even higher,
as over three quarters of people (77%) like the idea of using
redundancy as an opportunity to start-up on their own.
The research shows that most people would use redundancy to change their life. Apart
from going into business, two in ten (21%) would change or train for a new career,
while one in ten (10%) would relocate abroad. Less than a quarter (24%) would try to
keep the status quo by looking for like-for-like employment.
However, of all the options open to those facing redundancy, setting up a business
is the most popular. And for many it would mean realising a lifelong ambition. Only
one in ten people (13%) have never harboured entrepreneurial dreams. Two thirds of
Brits (61%) have dreamt of running their own business, but have never acted upon it.
Most gave up on the idea because they couldn’t afford to give up their regular
salary (40%). Only a quarter (25%) were not confident that they could make it
The main attraction for would-be business owners is the idea of doing something they
love and earning money from it – this appeals to almost half (46%) of people, while
almost a quarter (21%) like the idea of the challenge. An independent-minded one in
ten (13%) would relish the freedom of not having to answer to a boss.
Over a quarter (26%) would base their business on a hobby or activity that they
really enjoy, such as gardening, decorating or designing, while 28% would be
prepared to try something completely different to exploit a gap or opportunity in
the market. 22% would simply take their current job, but do it for themselves rather
than for an employer.
Enterprising Brits also appear to be ready to put their money where their mouth is -
67% would be prepared to invest part or all of their redundancy into a new business,
with two in ten (20%) prepared to invest it all. And getting a redundancy payout
could be the launch pad many budding entrepreneurs need – 14% of those who have
dreamt of starting a business were prevented from going ahead because of lack of
But while there is an air of optimism about redundancy and what it could lead to,
people are still realistic about what it takes to run a business. They are fully
aware of the potential downside, with 38% most concerned about lack of security in
the current economic environment and 30% turned-off by the prospect of the red tape,
regulation and bureaucracy. Only a third (36%) think they could do a better job of
running a company than their boss.
Jake Ridge, small business expert at uSwitchforBusiness.com, says: “Being
made redundant can act as a catalyst, pushing people to make life changes they may
have previously only dreamed about, whether starting a new business or a new life
abroad. In these instances it can have a positive impact on people’s lives, lifting
barriers that have prevented them from fulfilling long-held dreams.
“61% of us have dreamt of starting a business but haven’t done so, mainly because of
the fear of giving up a regular salary and because of lack of finance. As well as
impetus, redundancy can provide the cash needed to finance a start-up and 67% of
people would be prepared to invest some or all of this into their dream business.
“With this level of commitment, it is vital that people go into business with their
eyes wide open. Getting the right advice and support is key, which is why we are
offering a dedicated SME service. This provides free information and advice as well
as practical tools to keep running costs low. Getting the right help upfront could
make the difference between flourishing or failing – it could help keep many more
dream businesses on track.”
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products and car insurance.