Half of UK's entrepreneurs held back by skills shortage

A lack of financing and the skills shortage is holding back the UK's entrepreneurs, according to a recent survey by the Institute of Directors (IoD).

The research showed that some 42 per cent of the 650 entrepreneurs surveyed - who were all under the age of 35 - reported that they had difficulty hiring people with the right skills, while almost 40 per cent of entrepreneurs said that problems accessing financing had put a halt on the growth of their company.

What's more, 56 per cent of respondents relied on personal unsecured finance such as credit cards, while a further 53 per cent said that money from their families had played a major role in helping to grow their business.

The respondents agreed that access to skilled employees and good digital infrastructure are key for starting a new business.

Jimmy McLoughlin, deputy head of policy at the IoD, said: "The start-up revolution has taken hold in Britain like nowhere else in Europe.

"It is a worry, therefore, that so many start-ups struggle to hire skilled employees. The push to teach children digital skills is part of the long-term solution, but it is also crucial that Britain's immigration system is open and easy to navigate."

Mr McLoughlin concluded: "Finding people with the right skills, and tapping into the right mix of finance will be the biggest factors in achieving scale-up success. For start-ups, overcoming these obstacles can be the difference between success and failure."

He urges more budding entrepreneurs to utilise processes such as crowdfunding -  the practice of funding a project or venture by raising monetary contributions from a large number of people - and peer-to-peer lending to help their businesses grow.

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