Access to finance is the major barrier to starting a business, according to Northern entrepreneurs.
In a survey by accountancy firm EY, 55% of respondents cited funding as a key hurdle to launching a business, followed by fear of failure (53%) and uncertainty of income (37%).
In contrast, only 6% of respondents thought that bad market conditions could hold back entrepreneurs, while just 10% cited the possibility of going bankrupt as a barrier to starting a business.
EY polled more than 50 Northern entrepreneurs to gather their views on the factors they feel can help or hinder growth. Almost all of them have well-established businesses with 81% of respondents running their companies for at least a decade.
Stuart Watson, EY’s Yorkshire and Humberside senior partner, said: “Matching funding to business growth plans remains a key area of concern for ambitious entrepreneurs, not least as rapid growth tends to absorb cash.
“Business leaders that develop controls over cash and cash forecasting as they grow are able to plan early for fund raising and are more likely to attract investors.”
Some 37% of Northern entrepreneurs – the highest percentage of all UK regions – said that using their retained profit to grow their businesses would be the most attractive route if they were considering secondary funding sources.
Just over one in five said that they would look to bank funding (22%), while 12% would consider private equity investment.
Mr Watson said: “There are a wide variety of options for funding growth. However, these are often complex and take time to review and, those that can would prefer to use retained profit – as illustrated by our survey.
“While there have been many initiatives around access to finance at a policy level, the responses from our survey suggest that politicians should focus on how to encourage greater investment in the fast growth companies in the economy.”