02 Feb Is combining youth with experience the key?
Company formations are on the increase by the young, but it appears that they should find a wiser head to help them out if they want to succeed.
Research by Experian has found that the number of young entrepreneurs starting their own business has increased by nearly a quarter (22%) in the last three years but their survival rates are not enviable.
Almost half of these businesses (45%) are wound up within two and a half years and a further 22% fail between two and a half and three years. However, if they combine forces with an older (over 26) business partner, 39% of businesses survive post three years (compared to just a third when started by a sole young director).
A lot of people are advocating the entrepreneurial spirit of the young as a way to bring growth to the UK and these people often focus on a few success stories as evidence for this assertion and it definitely seems to be encouraging the young to start their own businesses. It appears though that these young directors lack the experience, capital and contacts to truly make a success of their businesses. This lack of experience also seems to drive them towards ‘vulnerable’ sectors of the economy according to the Experian research.
So if we are going to encourage the next generation in the entrepreneurial ways then we also owe it to them to make sure they have the support and resources available to them to make a success of it.