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5 Avoiders & Barriers to Enterprise
5.1 The previous chapters have looked at the experiences, characteristics and key motivators for Thinkers and Doers. In this chapter, we turn our attention to the attitudes that Avoiders hold towards entrepreneurship. We examine whether Avoiders have had any prior experience of owning a business, the barriers they face to becoming entrepreneurs in the future, and the ways in which these hurdles can be overcome.
Barriers to entrepreneurship
5.2 The chart below shows which factors Scottish Avoiders cite as being barriers to becoming an entrepreneur 26. The white boxes show percentage differences from the 2003 survey.
Chart 9: All barriers to entrepreneurship
5.3 As in 2003, financial factors figure highly among barriers to entrepreneurial activity. Over half (57 per cent) of all Avoiders cite 'fear of getting into debt', with 51 per cent mentioning difficulties 'getting finance for the business', 44 per cent 'worries of insufficient sales/profit', and 39 per cent the 'fear of adding to existing debt'. Similarly, 52 per cent are afraid that their business might fail.
5.4 Forty-seven per cent of all Scottish Avoiders feel that the loss of the security, income and promotion prospects attached to their current job would prevent them from becoming an entrepreneur. Thirty-five per cent would be hampered by not being able to come up with an idea for their business, with a similar number (35 per cent) believing that they would not have the requisite skills to set up and operate a business.
5.5 Encouragingly, there have been falls since 2003 in the proportion of Avoiders citing the majority of these potential barriers. Most notably, 'fear of adding to existing debt' has dropped by 15 percentage points in Scotland, and 'fear of getting into debt' by 11 per cent.
5.6 Equally, fewer Avoiders are scared that their 'business might fail' (14 per cent drop), and that they would be concerned about 'not being able to make enough profit' (15 per cent drop). These findings point to Avoiders being increasingly confident and upbeat, seeing less standing in their way to starting up in business in the future.
5.7 A similar pattern is seen in England in terms of the ranking of barriers, and the declines in the proportions mentioning them since 2003. In England, however, each barrier tends to be mentioned by two to three per cent fewer Avoiders.
5.8 As has been seen in previous years, female Avoiders are more likely to cite barriers than men. Particularly noticeable is the gender gap in terms of 'the amount of time involved' and 'the effect on domestic responsibilities', mentioned by 43 per cent of women compared to 34 per cent of men.
5.9 Women in Scotland are also more likely to cite 'fear of getting into debt' (58 per cent compared to 55 per cent of men), 'getting finance for the business' (52 per cent compared to 48 per cent), and 'worry of insufficient sales / profits' (46 per cent compared to 42 per cent) as barriers to entrepreneurship. Indeed, the only factor men are more prone to mention is 'losing the security', 'income or promotional prospects from their current job' (49 per cent compared to 45 per cent of women). Similar trends are seen in England.
5.10 Where Avoiders cited at least three barriers to setting up their own business or becoming self-employed, they were then asked to narrow these down to the two they thought to be most important. The chart below combines these with the barriers mentioned by those who gave two or less.
Chart 10: Two biggest barriers for Avoiders
5.11 Broadly speaking, there is a similar pattern here. Fear of getting into debt and getting finance for the business top the list, each mentioned by a quarter of Avoiders. Losing security from a current job is cited by just over one in five (21 per cent).
5.12 When looking at these most important barriers, women are significantly more likely than men to mention 'fear of getting into debt' (28 versus 24 per cent), 'the amount of time/work involved' (20 versus 12 per cent) and 'a lack of interest/motivation' (4 versus 2 per cent). Men are more likely than women to mention the complexity of regulations (10 versus 7 per cent).
5.13 'Losing the security from one's current job' is most likely to be a significant barrier among 25-44 year olds (28 per cent). This is also the case with 'the amount of time/work involved' (21 per cent of 25-44 year olds).
5.14 Just over one in ten (12 per cent) feel that age is a primary obstacle to them becoming an entrepreneur. As might be expected, the youngest and oldest respondents are most likely to see this as a key issue (20 per cent of 16-24 year olds, rising to 38 per cent among 16-18 year olds, and 31 per cent of 55-64 year olds). For the 16-24 year olds, this would seem to be closely tied in with a lack of knowledge about how to start and operate a business, mentioned by 17 per cent of this group (compared to 11 per cent overall).
Overcoming barriers
5.15 Having considered the barriers which prevent Avoiders entering the world of entrepreneurship, we now move on to look at enabling factors that could potentially 'convert' these people into Thinkers and ultimately Doers of the future:
Chart 11: What might make Avoiders become entrepreneurs
5.16 Thirty-four per cent of all Avoiders feel that nothing could 'push' or 'pull' them into thinking about starting up a business or becoming self-employed 27. This would equate to just over a quarter (27 per cent) of the 16-64 year old population in Scotland.
5.17 Younger respondents are less likely to feel that nothing could tempt them into setting up their own business, with this percentage rising quite steeply from 24 per cent of 16-24 year olds to 55 per cent of 55-64 year olds.
5.18 Just over one in six (15 per cent) state that they would need 'access to the finance required' for this possibility to be realised.
5.19 Nine per cent of Avoiders would entertain the thought of setting up in business if they 'had a desire to make an idea happen', and five per cent would if they saw a niche emerge in a particular market.
5.20 A similar proportion (9 per cent) believe that being made redundant might give them the push to think about becoming an entrepreneur. Seven per cent feel that the desire to be their own boss could one day lead them in this direction.
Previous experience of owning a business
5.21 The majority of Avoiders (88 per cent) have never owned a business, part-owned a business, or been self-employed before. Just 6 per cent in Scotland have been engaged in entrepreneurial activity within the last five years, and a further 7 per cent in the more distant past. Again, figures in England are very similar.
5.22 As could be expected because of the length of time that they have been economically active, older Avoiders are more likely to have been entrepreneurs previously than their younger counterparts.
5.23 One in ten Scottish Avoiders who have not owned businesses or been self-employed in the past have ever considered starting a business, buying into an existing business or becoming self-employed.
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