'Everyday support' urged for new firms

The government should do more to support entrepreneurs from disadvantaged areas in their first years of trading, a leading business body has urged.

Research from the National Federation of Enterprise Agencies (NFEA) says entrepreneurs from underprivileged backgrounds often struggle most with everyday problems such as living expenses and finding childcare while they try to nurture their new businesses.

Family support, a penchant for taking risks and strong resolve are often the only ways many of these businesses survive.
"There is a strong emphasis within government policy on helping people take the first steps in business, but this evidence suggests that many practical problems kick in during the early years of a business when an entrepreneur is much more isolated," said George Derbyshire, chief executive of the NFEA.

"The business support sector and government need to work together to devise practical solutions to ensure that perfectly viable businesses don't fail for the want of a little practical help to get them through their first few years."

Savings and other personal sources of finance were an option for only 11% of respondents.

Derbyshire said the government's benefits system should be more flexible in supporting these start-up businesses.

"At present, the system assumes that if you are self-employed you are earning a living wage," he said. "This is often not the case, and a little help at this stage through benefits or tax credits might allow many entrepreneurs to cope until the business can properly support them.

In terms of childcare, while most said they tried to run their business during school hours, nearly half said they would sometimes look after their children at the same time.

A quarter said they paid for childcare services, but overall, half relied on their partners and over a third looked to other family members to help.