Half of all start-ups founded on £500 or less

According to a new report, nearly half of all small businesses are founded on less than £500.

Yell Business, which published the figures, found that while 40 per cent of small businesses are built on a budget of less than £500, some 32 per cent are started on less than £250.

Yell’s survey further found that a small budget hasn’t stopped start-ups from being successful. Around 93 per cent of small business owners said they recorded a profit last year, with 85 per cent reporting their business was either very, or quite successful.

The research also dispels the myth that businesses require loans or large investments to get off the ground.

Prior to the survey, separate research found that 40 per cent of business owners perceived lack of money as the biggest barrier to business success. A further 25 per cent said risk of failure was enough to dissuade a prospective entrepreneur, while 23 per cent reported not knowing how to start.

Mark Clisby, marketing director of Yell Business said: “As our research found, the current catalysts for taking the leap and starting a business include inheriting funds (24 per cent) and being made redundant (15 per cent). However hopefully, the positive revelations around low start-up cost and high success, will give the inspiration needed to budding entrepreneurs, so that they don’t wait for scenarios like this to happen to them.

“For anyone in the process of starting up, my advice would be to thoroughly research your market before making the leap – and to prioritise digital. From a website, social media to reviews, this is essential for any business in 2017.”

The study also found that some 51 per cent of the nation have thought about setting up a business, while a third (31 per cent) are unhappy with their current employment.