HR could face a staff retention crisis in the new year; latest findings reveal that one in five people are planning to start their own business in 2005.
The survey of 500 employees by Begbies Traynor, an independent insolvency and corporate strategy specialist has unveiled worrying findings for employers which show that unhappiness at work has confirmed their decision.
Nineteen per cent said their motivation stemmed from the frustrations of someone else profiting from their hard work. While the overwhelming majority of 61% say they just want to work for themselves.
Men still appear to dominate the entrepreneurial scene. Seventy one per cent of respondents planning to start a new business are male.
Despite the vast majority (61%) believing that it will take them just two years to make a profit, the survey shows that most are unprepared for the strains of being an employer.
Sixteen per cent admitted that they haven’t thoroughly researched their market, a key step in setting up any business. Moreover, when asked whether they understand their legal duties as a prospective boss, 16% admitted that they didn’t. Yet only 55% of respondents are intending to hire a lawyer. Only 81% claimed to understand their company’s tax and accounting filing responsibilities, although 84% are planning to hire an accountant.
In a silver-lining for HR the two most common reasons given by the 80% of respondents not thinking of starting a business next year were that they are happy in paid employment (68%) and that they don’t fancy taking the risk (62%).
Nick Hood, senior London partner at Begbies Traynor commented:
“It’s great to see so many people taking the initiative and planning to set up their own business in 2005.
“However, I am concerned that some of these entrepreneurs appear unprepared. As business rescue experts, we see a significant number of businesses in trouble every year and key failings include having no business plan, insufficient market research and poor cash planning. Forty per cent of all new businesses fail in the first two years, but this sad wastage would be much reduced if these essentials were in place at the outset.”
Latest BDO Stoy Hayward Industry Watch figures reveal, however, that these new entrepreneurs optimism might be well founded. According to the figures, 2004 is expected to record the lowest number of business failures for six years.
