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Entrepreneurs in East of England most likely to make a Profit, says Survey

30/06/2017

According to new YouGov research commissioned by wealth manager Kleinwort Hambros*, entrepreneurs in the East of England are more likely to succeed in setting up a business than their counterparts in the rest of Britain.

According to new YouGov research commissioned by wealth manager Kleinwort Hambros*, entrepreneurs in the East of England are more likely to succeed in setting up a business than their counterparts in the rest of Britain. Indeed, 15% of existing business owners in the East of England agreed with the statement that they had previously failed to set up a business compared to 19% of their counterparts in the Midlands, 19% in the North of England and 30% in London.

The research, which surveyed business owners across Great Britain, found that entrepreneurs in the East of England were most likely to generate a profit in the first year of trading, with 68% of entrepreneurs in the East saying that they had made a profit in their first year of trading compared to 58% of business owners in the South of England and 51% in London.

In addition, the findings show that business owners in the East of England were most likely to anticipate business growth with 31% saying they expected to achieve 5% growth in trading profit within the next year compared to just 17% in the Midlands and 19% in London. Of all the business owners, those in the East of England were the most optimistic about growing their operating profit by 15%. Indeed, 6% of business owners in the East of England said they would grow their profits by 15% in the next twelve months compared to just 3% of business owners in the North and 2% in London.

William Quantrill, director, who leads the team of private bankers in the Kleinwort Hambros offices outside of Cambridge, said: “Business owners in the East of England are right to feel confident as the region generally is a real hot spot for entrepreneurialism. Cambridge itself is popular as a world-class location for prestige businesses, it is a centre of technology, science, innovation, research and development. Over the past few years, we have certainly seen more and more successful entrepreneurs coming to us because they have built up their businesses and are ready to sell them.”

One of the reasons for the early success of business owners in the East of England may be their ability to find alternative sources of funding. For example, when asked how they financed their business, 10% of business owners in the East of England said they used alternative finance loans compared to just 3% of business owners in the Midlands and 3% in London.  But entrepreneurs in the East of England were amongst the least likely to use their own savings to fund a business with just 49% saying they used their own savings to fund their business ventures compared to 63% in the Midlands and 54% in the North of England.

Interestingly, business owners in the East of England were most likely to cite lack of financial support as a barrier to success with 34% agreeing with the statement that they suffered from lack of financial support from the government compared to 26% of business owners in the Midlands and 26% in London.

William Quantrill added: “As a private bank which tends to deal with entrepreneurs at a later stage in their business cycle, we are seeing a lot more successful entrepreneurs coming to us who have received their initial funding from private investors and alternative sources of finance. This is clearly an emerging trend, and over the last decade in particular, alternative forms of finance for fledgling businesses is becoming more widely accepted, especially for younger entrepreneurs who are grateful for the support.”

Interestingly, business owners in the East of England were among those most likely to sell their businesses if an acceptable offer were made to them. Indeed, 55% of entrepreneurs in the East of England said they would sell their business, slightly behind 57% of London, this is compared to 48% of business owners in the North of England and 49% in the Midlands.

*SGPB Hambros