Wealth creators assessing the impact of UK entrepreneurs on society

Wealth creators Assessing the impact of UK entrepreneurs on society Contents Executive summary About this report Introduction Entrepreneurial driving forces Entrepreneurs and social responsibility 11 The role of government 15 Conclusion 18 Appendix: Survey results 20 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society Executive summary Entrepreneurs are seen as a key driver of the UK’s economic recovery, and new businesses are on the increase This year alone, over 44,500 start-up businesses had registered by mid-February, according to the government’s StartUp Britain website But beyond their economic importance as taxpayers and employers, these wealth creators make other positive contributions to society Yet the UK often has a distinctly ambivalent attitude towards the affluent individuals who succeed in their business ambitions To explore the motivations of Britain’s entrepreneurs, their attitudes to social responsibility and the challenges they face, the Economist Intelligence Unit, on behalf of Lloyds TSB Private Banking, conducted a survey of 300 wealth creators as well as interviews with business owners, academics and government officials Key findings of the research include: Entrepreneurs believe they make a positive contribution to society Almost three-quarters (70%) of business owners see the role of entrepreneurs as a good thing for society in general They have become increasingly generous with their time and money Two-fifths of respondents now contribute hours of personal or business time to charitable work—up from 32% five years ago The proportion giving money to local organisations has also risen, with 86% giving to charity Determination and independence drive entrepreneurs Freedom to be their own boss is the key motivation for starting a business for 55% of respondents, while almost 40% identify work satisfaction as a major driver Once in business, almost two-thirds of respondents pinpoint determination as the main source of their success Tax and a sluggish economy are the biggest challenges for wealth creators Almost half of respondents (49%) view government policy and tax as the top constraint when creating personal wealth from their businesses, and a similar number (46%) see the economic situation as the main limitation More governmental support is needed for wealth creators There is a strong sense (85% of respondents agree) that the government could much more to encourage and support potential entrepreneurs And although 45% of respondents believe the government recognises entrepreneurs’ contribution to society, there is less conviction that they are given the practical support they need to provide further social input © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society About this report In January 2013 the Economist Intelligence Unit, on behalf of Lloyds TSB Private Banking, surveyed 300 UK entrepreneurs to explore their motivations, challenges and attitudes to social responsibility  Rupert Hodson, co-founder of the online financial services marketing firm, Dianomi In addition, in-depth interviews were conducted with entrepreneurs and experts Our thanks to the following for their time and insight:  A spokesperson from the Department for Business, Innovation & Skills  Simon Deakin, assistant director of the Cambridge Centre for Business Research  Stephen Unwin, founder of the soft drinks firm, Cawston Press, and a business coach with the Actioncoach franchise The report was written by Faith Glasgow and edited by Monica Woodley of the Economist Intelligence Unit  Jonathan Haward, founder of the property search firm, The County Homesearch Company, and the online memorial service, Friends and Relations © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society Introduction It is no secret that the entrepreneurial spirit plays an increasingly significant role in the UK economy In 2011 Prime Minister David Cameron called for an “enterprise-led” recovery from the financial crisis and its economic fallout, and the figures suggest that despite challenging economic conditions, the country’s entrepreneurs remain eager to take the plunge and set up new businesses Figures from the Department for Business, Innovation & Skills (BIS) show continuing steady growth in the number of small and medium-sized enterprises (SMEs) in the UK There were a record 4.8 million SMEs at the start of 2012—up from 4.5 million in 2011, and an increase of almost 40% since 2000 (the earliest point for which comparable data exists) The vast majority (99.2%) of those SMEs were small businesses employing less than 50 people Yet their economic contribution is critical Apart from the potential private wealth generated by the owners themselves, BIS figures show SMEs account for 60% of employment in the private sector and almost half of private-sector turnover The government has launched diverse initiatives to attract new entrepreneurs into the business arena, and to nurture existing small businesses Yet at the same time there is continuing debate about the appropriate use of wealth, and about the social, environmental and financial responsibilities of those who acquire it This report explores the motivations driving Britain’s entrepreneurs and the challenges they face It examines their attitudes to corporate and individual social responsibility, and considers how far such responsibility is embedded in the dayto-day operation of today’s SMEs Finally, it looks at the extent to which the government is succeeding in its efforts to provide entrepreneurial business ventures with practical support and to inspire new entrepreneurs to join their ranks © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society Entrepreneurial driving forces In line with the government statistics quoted above, this survey highlights the fact that small businesses are the UK’s real economic bedrock: more than four-fifths (81%) of respondents’ primary businesses have an annual turnover of less than £3m, and indeed 38% turn over less than £150,000 a year So what motivates entrepreneurs to take the risks associated with setting up and running a business? It is definitely not all about making money per se, according to the survey findings Ambitious owners of small businesses are likely to plough much of their profits back into the business at that stage of development In fact, wealth is a somewhat elusive concept for many: almost three-fifths (59%) of respondents have less than £1m in personal investible assets, and only 5% have more than £5m When asked to identify up to three motivating factors, 55% of business owners cite independence—the fact that it enables them to be their own boss—while almost two-fifths (38%) are driven by the personal satisfaction they get from the job Only 12% of respondents admit to being driven by the sheer enjoyment of making money These results strike a chord with our interviewees “True entrepreneurs are ambitious, restless and looking for new challenges; they’ve always wanted to their own thing and hate to be constrained,” says Stephen Unwin, founder of the soft drinks firm, Cawston Press, and a business coach with the Actioncoach franchise “But I think that the inclination to break the mould and the desire for success, including financial success, tend to go hand in hand.” Rupert Hodson is co-founder of Dianomi, which provides online marketing for financial services firms His main motivation for setting up the company was the desire to be his own boss and the flexibility that goes with it “Financial security for my family is also increasingly on my mind; you can achieve that in other ways, but this is a more focused and exciting way, and you get a great sense of achievement,” he says Motivations may change to some extent once the business is up and running The desire for personal satisfaction in one’s work becomes stronger, while the novelty of running one’s own show loses some of its appeal Retirement considerations—financial security and the potential to retire early—also become more pertinent, unsurprisingly Mr Unwin makes the interesting point that many entrepreneurs find themselves being business owners by chance, rather than as a result of strategically planning a start-up “Cawston Press started because I was running a juice firm called Copella, which included the Cawston brand, and was offered the chance to buy back the Cawston part of it when the whole firm was sold to Tropicana,” he says “It’s not unusual to end up with a business through such an opportunity or because you inherited it, but it still takes an entrepreneurial mindset to commit to that route.” What factors entrepreneurs consider most influential in their success as business owners? Sheer determination to succeed is considered by far the most important element in success, with 62% of respondents citing it Perhaps surprisingly, bearing in mind the ebullient character of many high-profile wealth creators, © The Economist Intelligence Unit Limited 2013 True entrepreneurs are ambitious, restless and looking for new challenges; they’ve always wanted to their own thing and hate to be constrained I think that the inclination to break the mould and the desire for success, including financial success, tend to go hand in hand Stephen Unwin Founder of Cawston Press, Business coach with the Actioncoach franchise Wealth creators Assessing the impact of UK entrepreneurs on society Chart What were the main motivations for you to start your business and create wealth? What are the main motivations for you to run your business and create wealth? (% respondents) When starting business Ability to be my own boss Personal satisfaction in my work Now running business 55% 43% 38% Financial independence A better personal lifestyle 45% 31% 30% 25% 29% 18% Seizing opportunity Being able to create something new/innovative 17% 12% 14% Financial security in retirement 22% 12% 12% Enjoyment of making money 11% 15% Ability to retire early Personal development 6% 10% Financial security for children 7% Being able to contribute to the economy/society (eg, through employment, etc) 7% Being able to help others (eg, through philanthropy, etc) 4% Status 3% 7% 13% 7% 9% 4% Note Figures not add to 100% as respondents were able to select up to Source: The Economist Intelligence Unit few respondents (8%) claim any innate talent for wealth generation, and only 12% put it down to a hearty appetite for risk However, Jonathan Haward, founder of the property search firm, The County Homesearch Company, and, more recently, of the online memorial service, Friends and Relations, makes the point that anyone who sets up their own business has to be a risk-taker “The important © The Economist Intelligence Unit Limited 2013 thing is that it is a calculated risk and you have all your ducks in a row when you it,” he adds As noted, accessible wealth can be an elusive concept for many business owners, particularly those in the early stages of business growth Almost one-third (29%) of respondents say that the need to reinvest profits presented a challenge to creating personal wealth from their businesses during that time Wealth creators Assessing the impact of UK entrepreneurs on society But while the need to plough everything back into the business may be a short-term irritant, it is likely to be viewed as an inevitable step in the growth process “Our focus is very much on the business and growing it,” Mr Hodson says “On that basis we put everything we can back into it, taking a salary that covers our day-to-day living costs, but sadly not much else.” Mr Haward takes a similar view that continuous investment is essential, particularly in technology and data security “I can’t really say that I have had much conflict between taking personal wealth and investing into the business, because I so enjoy it,” he says “I get a lot of job satisfaction when I can see a business investment is paying dividends in terms of improved quality.” On the whole, respondents perceive their biggest challenges in amassing wealth to be at a macro rather than a micro level Mr Haward cites tax as the biggest disincentive to running a business in this country “We have to employ people specifically to ensure we comply with the tax legislation,” he says “It’s expensive and there are huge penalties if you’re late It’s a massive turn-off.” But other interviewees are more sanguine Both Mr Hodson and Mr Unwin accept their personal and business tax obligations as being “in the nature of success” “Some companies I’ve coached have received penal tax bills, especially in the downturn, after a previous much more successful year,” Mr Unwin says “Those did cause headaches, but HMRC [HM Revenue & Customs] showed some leniency and was able to arrange payment plans.” Chart Which of the following factors you believe have been the most influential in helping you achieve your business success? (% respondents) 62% Determination An understanding of money from an early age 38% 33% University education Independence from an early age 22% Modest family background 18% School education 17% Peer group High appetite for risk Innate talent for wealth generation 15% 12% 8% Strong family ties 7% Support from individual family member 7% Financial advice (from banks, accountants, advisers, etc) 4% Local business networks 1% Wealthy family background 1% Note Figures not add to 100% as respondents were able to select up to Source: Economist Intelligence Unit Simon Deakin, assistant director of the Cambridge Centre for Business Research (CBR), points out that there are many regulations that help small businesses, but their effects may not be particularly visible “A lot of corporate social responsibility is about maintaining the reputation of the brand, demonstrating accountability, being seen to observe industry standards and paying tax,” he explains “Of course businesses want to compete, but no one benefits from a race to the bottom.” The government, meanwhile, points to its efforts to reduce red tape for companies “We are continually working both to reduce regulation and to enforce necessary regulations more adroitly, minimising burdens on compliant businesses,” says a BIS spokesperson Businesses are expected to save an estimated £1bn by June 2013 as a result, she adds The government has also implemented a ‘one in, two out’ requirement, which means that for every regulatory cost imposed on businesses, government departments must © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society implement savings worth double that sum “This is a major culture change that puts Whitehall on the side of business,” the BIS spokesperson claims BIS has evidently had some success in its campaigns to reduce the burden of bureaucracy— the spokesperson flags up the fact that in 2012 the World Bank ranked the UK seventh out of 183 countries for ease of doing business, “meaning the regulatory environment in the UK is open to starting and operating a business” Despite headlines about small businesses being choked by a lack of readily accessible finance, only 10% of survey respondents say that they have been hamstrung Mr Hodson makes the point that the banks are ready to lend, but corporate borrowers have to find the collateral—typically their own homes—to back their loan He and his co-founders were lucky in that they were able to call upon investment from friends and family, and also received some venture capital input; they were not prepared to put their family homes on the line But Mr Unwin maintains that the biggest challenge for a lot of his clients is simply their overly cautious mindset “A lot of what I as a coach is to equip business owners with the business skills and tools for growth in order that they can realise their full potential and greater rewards; better skills gives them the ability to make better decisions and often encourages them and gives them the confidence to move forward and take new investment opportunities —the recession has sapped their confidence,” he says Beyond the financial issues associated with running a business, the survey identifies other drawbacks to life as a successful entrepreneur Too much commitment, in terms of long working hours and work pressure, is the prime culprit Chart What are your greatest challenges when creating personal wealth from your business? (% respondents) 49% Government policy (eg, taxation) An underperforming economic environment 46% Having to reinvest profits into your business 29% Keeping personal and professional finances separated 28% Ambition (eg, business takes priority over lifestyle) 27% I not face a challenge in this area 12% Lack of reliable/readily attainable financial advice 10% Note Figures not add to 100% as respondents were able to select up to Source: Economist Intelligence Unit Chart Which of the following you think are the most significant disadvantages of being a successful entrepreneur? (% respondents) 58% Excessive working hours 43% High amounts of pressure Pressure to meet government regulations 31% Risk of losing large sums of money 31% 27% Lack of financial security Requirement to fulfil a high number of different roles Fear of failure Lack of corporate support network Keeping personal wealth separate from your business activities 25% 16% 12% 5% Note Figures not add to 100% as respondents were able to select up to Source: Economist Intelligence Unit © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society The UK’s wealth creators in profile The number of entrepreneurs in Britain may be rising in the 21st century, but the gender and location profile of respondents indicates that as yet there isn’t equal access to entrepreneurial opportunities Chart What is the approximate value of your personal investible assets? (% respondents) Female 47% £250,000 - £500,000 28% 29% £500,000 - £1m 28% £1m - £2m 10% £2m - £5m 8% £5m - £10m More than £10m Male 28% 12% 4% 2% 2% 3% Women entrepreneurs account for only 16% of survey respondents, and are also much more skewed to the lower echelons in terms of personal wealth But that imbalance may be explained in part by the fact that women respondents also tend to be younger and therefore to have had less time to accrue wealth Overall, entrepreneurial energy and opportunity appear to be things that most people still come to later in life—only 6% of respondents are aged less than 40 and three-quarters (74%) are aged between 50 and 70 The survey also provides clear evidence of the strength of the north-south divide as far as personal wealth and SME activity are concerned Two-thirds (66%) of respondents are based in London and the South In contrast, less than 9% are located in the Midlands, 8% in Yorkshire and the North, and 7% in Scotland Given the entrepreneurial legacy of these regions, such pronounced disparities raise the question of what could be inhibiting business growth and wealth creation there Less access to start-up resources, poorer infrastructure, a lessdynamic business environment and less-prosperous local markets might have something to with it, suggests Mr Unwin It is also unsurprising that the business focus of today’s entrepreneurs has shifted away from traditional areas such as retail towards the service sectors Almost one-third (31%) of respondents are involved in professional services Source: The Economist Intelligence Unit © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society  Supporting local communities  Mentoring of SMEs by larger businesses  Improving employee well-being  Protecting the environment and carbon reduction At present “it is up to individual businesses to determine for themselves if and how they might respond” to these ideas; however, BIS plans to publish a framework for action on corporate responsibility, setting out the government’s plans in that respect What about assistance for start-ups? The survey reveals a strong sense that the government needs to provide more support for potential entrepreneurs, with 87% of respondents in agreement that not enough is done to help them Yet BIS insists it has been proactive “We have changed the way we help people access the information, advice and guidance they need to start and grow their business,” says the spokesperson “Businesses tell us that they most value support and advice from other businesses, so we’ve built features into our new services to enable them to this quickly and effectively.” The focus is on small business growth, increasingly provided by the private sector However, there is still scope for further government-led initiatives There clearly is a significant gap between the view of BIS and the less-rosy perception held by the SMEs surveyed of the government support they are receiving, which in part may be down to shortcomings in communication of what is available Chart 10 Do you agree or disagree with the following statement? Governments encourage businesses to contribute to society (% respondents) Strongly agree Overall Somewhat disagree 36 25 40-49 50-59 11 Strongly disagree 22 50 14 30-39 70+ Neither agree nor disagree 29 10 18-29 60-69 Somewhat agree 29 22 25 29 38 31 36 28 26 22 37 36 21 20 36 18 Source: The Economist Intelligence Unit © The Economist Intelligence Unit Limited 2013 15 Wealth creators Assessing the impact of UK entrepreneurs on society Government initiatives to support SMEs  Business in You, launched in January 2012, is designed to inspire would-be entrepreneurs and highlight the range of support available (www businessinyou.bis.gov.uk)  Young people aged 18-30 can now apply for a start-up loan; an additional £3m has been added to the fund, taking the total available to £110m (www.startuploans.co.uk)  The mentoring portal, www.mentorsme co.uk, provides a single access point to bring together mentoring organisations and those looking for guidance Services may be free or paid-for There are now 27,000 mentors across the UK listed on the portal There are also several finance schemes in place, including the Enterprise Finance Guarantee scheme for businesses without the collateral or track record to access bank lending; Enterprise Capital Funds, in the shape of venture capital for new businesses with high growth potential; the Business Finance Partnership, which provides alternative sources of lending; and the Funding for Lending scheme, which is encouraging banks to lend more freely  SMEs with potential for rapid growth could apply to www.growthaccelerator.com for additional help from a qualified coach 16 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society Conclusion Wealth creators have faced major challenges over the past few difficult years, yet there is no sign of the taste for entrepreneurship dwindling in the UK—indeed, it’s quite the reverse, as SME and start-up numbers continue to rise As they probably always have been, wealth creators are determined and patient players, prepared to invest and reinvest to realise their business vision However, they are driven less by the dream of wealth for its own sake than by the independence, flexibility and job satisfaction they associate with running their own business At the same time, they are also increasingly aware of their potential to make broader social contributions in a variety of ways and of the fact that such social and environmental efforts can pay dividends over time in terms of making their business more sustainable and strengthening its public image But while such efforts are seen as feasible for thriving, growing businesses, the perception is that they are beyond the means of the smallest enterprises, which simply not have either the time or means to invest in socially orientated initiatives It is evident that this government’s initiatives to nurture enterprise and improve business conditions have not percolated through effectively to SME owners who might benefit from them Business owners are still inclined to see much of what the government does in terms of regulation and tax as restrictive and designed to make their lives more difficult, suggesting that part of the issue is to with building better direct, effective channels of communication between the powers that be and small business communities around the country Similarly, the government has work to in promoting the various ways in which businesses can make valuable and rewarding social contributions beyond providing employment and paying tax BIS’s forthcoming framework for corporate responsibility should help to clarify best practice, but it will need to think laterally about how best to get the message to companies, and how to help them embed these ideas sustainably in their business over the long term The bottom line is that wealth creators remain the bedrock of the UK’s economy, with a crucial role to play both in driving the economic growth that has proved so elusive in recent years, and also in shaping and embedding good business practices in this country; their importance to wider prosperity cannot be overstated Crucially, they are running their own businesses because they are happy to embrace the vulnerabilities as well as the opportunities of being their own boss Indeed, they have pride in their entrepreneurial status and in many cases are keen to share their knowledge and experience with others If they receive the targeted, innovative support they need from government- and community-based sources, their ranks are likely to swell © The Economist Intelligence Unit Limited 2013 17 Wealth creators Assessing the impact of UK entrepreneurs on society How can entrepreneurs be better supported?  The bottom line is that the government needs to promote its various support channels more effectively, perhaps not so much to new businesses, which are likely to be actively exploring such opportunities, but to more established enterprises that could nonetheless benefit spillover, has opened up lots of opportunities for small businesses in Cambridge “With the right government-investment programme, similar high-tech clusters could be nurtured in large cities too,” he says “Firms can grow their capabilities, but they require an environment that’s resource-rich, which Cambridge is.”  Mr Haward would like to see a committee of small business owners set up to report back to government on the real practical problems facing the sector “The government needs a reality check and this would be fantastic,” he says  To make technology start-ups easier, Mr Deakin believes that the government should relax the rules regarding employee mobility “Highly skilled employees cannot move easily between firms as things stand,” he says “They have to take gardening leave, but new businesses really need to be able to recruit industry knowledge and skill.”  He also suggests a government-backed programme of seminars “where successful people can pass on precisely what’s involved in running a business, talk to budding entrepreneurs and assess their business plans It would help nurture those with potential and caution those that are likely to bomb—a sort of kindly Dragons’ Den.”  Mr Deakin points out that government investment in high-quality transport and healthcare infrastructure, as well as university 18 © The Economist Intelligence Unit Limited 2013  Mr Unwin believes that incentives and regulations are in place to support entrepreneurs, but that they need to be encouraged towards a less-negative outlook He has been asked by a bank to talk to local business owners to help them develop a more positive, entrepreneurial mindset focused on growing their business and learning new skills rather than merely surviving Wealth creators Assessing the impact of UK entrepreneurs on society Appendix: Survey results What is the approximate value of your personal investible assets? (% respondents) £250,000 - £500,000 31 £500,000 - £1m 28 £1m - £2m 25 £2m - £5m 11 £5m - £10m More than £10m In which region of the UK are you primarily located? (% respondents) South East England 28 Greater London 26 South West England 12 Scotland East of England North West England West Midlands East Midlands Yorkshire and the Humber Wales Northern Ireland North East England © The Economist Intelligence Unit Limited 2013 19 Wealth creators Assessing the impact of UK entrepreneurs on society What is your gender? (% respondents) Male 84 Female 16 What is your age? (% respondents) 18 to 29 30 to 39 40 to 49 17 50 to 59 36 60 to 69 38 70+ How many businesses have you started? (% respondents) 45 2-3 42 4-5 More than What is the annual turnover of your primary business? (% respondents) Less than £150,000 38 Between £150k and £500k 20 Between £500k and £3m 23 Between £3m and £15m 10 Between £15m and £100m Between £100m and £500m More than £500m 20 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society In which industry sector is your primary business? (% respondents) Professional services 31 Construction and real estate 10 Financial services 10 Transportation, travel and tourism IT, telecoms and technology Entertainment, media and publishing Retail Healthcare (hospitals, health insurance and health services) Industrial goods (steel, equipment, components, etc) Education Life sciences (including pharmaceuticals, biotechnology, medical devices) Energy and utilities Aerospace & defence Automotive Consumer goods Government/Public sector Agriculture and agribusiness Chemicals Logistics and distribution Other, please specify © The Economist Intelligence Unit Limited 2013 21 Wealth creators Assessing the impact of UK entrepreneurs on society Which of the following has been the most significant source of your personal wealth? Select up to three (% respondents) Income from job 58 Income from investments 38 Income from my business 38 Income from sale of property 17 Income from property rental 15 Sale of my business 11 Inheritance 10 Pension Marriage Gambling/lottery win Rich benefactor Divorce settlement Other, please specify 22 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society What were the main motivations for you when you were starting your business? and what are they now? Select up to three (% respondents) What were the main motivations What are the main motivations now Ability to be my own boss 55 43 Personal satisfaction in my work 38 45 Financial independence 31 30 A better personal lifestyle 25 29 Seizing opportunity 18 Being able to create something new/innovative 17 12 Financial security in retirement 14 22 Enjoyment of making money 12 12 Ability to retire early 11 15 Personal development 10 Financial security for children 13 Being able to contribute to the economy/society (eg, through employment, etc) 7 Being able to help others (eg, through philanthropy, etc) Status Other, please specify © The Economist Intelligence Unit Limited 2013 23 Wealth creators Assessing the impact of UK entrepreneurs on society Which of the following factors you believe have been the most influential in helping you achieve your business success? Select up to three (% respondents) Determination 62 An understanding of money from an early age 38 University education 33 Independence from an early age 22 Modest family background 18 School education 17 Peer group 15 High appetite for risk 12 Innate talent for wealth generation Support from individual family member Strong family ties Financial advice (from banks, accountants, advisers, etc) Wealthy family background Local business networks Other, please specify Do you agree or disagree with the following statements? Rate on a scale of to where is strongly agree and is strongly disagree (% respondents) Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree Entrepreneurs should be regarded as contributors to society 71 22 11 36 61 Social entrepreneurism is on the rise 13 44 I actively consider the social impact of my business 12 34 39 12 16 I actively consider the environmental impact of my business 11 35 35 I actively consider the financial impact of my business on the economy 14 24 36 © The Economist Intelligence Unit Limited 2013 35 10 Wealth creators Assessing the impact of UK entrepreneurs on society What are your greatest challenges when creating personal wealth from your business? Select up to three (% respondents) Government Policy (eg, taxation) 49 An underperforming Economic environment 46 Having to reinvest profits into your business 29 Keeping personal and professional finances separated 28 Ambition (eg, business takes priority over lifestyle) 27 Lack of reliable/readily attainable financial advice 10 Other, please specify I not face a challenge in this area 12 Which of the following you think are the most significant disadvantages of being a successful entrepreneur? Select up to three (% respondents) Excessive working hours 58 High amounts of pressure 43 Risk of losing large sums of money 31 Pressure to meet government regulations 31 Lack of financial security 27 Requirement to fulfil a high number of different roles 25 Fear of failure 16 Lack of corporate support network 12 Keeping personal wealth separate from your business activities Other, please specify © The Economist Intelligence Unit Limited 2013 25 Wealth creators Assessing the impact of UK entrepreneurs on society What are you currently doing to contribute to society? and what did you five years ago? Select all that apply (% respondents) Currently Five years ago Recycling 71 39 Donate to local organisations 43 32 Contributing hours of personal / business time to charities 40 32 Offering apprenticeships 16 12 Members of focus groups in local economy (ie, sit on local council) 15 12 Corporate Social Responsibility days (eg, fund raising days) 12 11 Other, please specify 4 Please indicate whether you agree or disagree with the following statements Rate on a scale of to where is strongly agree and is strongly disagree (% respondents) Strongly agree Somewhat agree Neither agree nor disagree Somewhat disagree Strongly disagree Government needs to give more support to potential entrepreneurs 51 35 10 Government recognises entrepreneurs’ contribution to society 17 29 30 18 Governments encourage businesses to contribute to society 10 29 36 22 People who have successfully started their own businesses achieve a high level of status and respect 14 41 32 12 If you have (or were to have) more free time as a result of selling your business, how do/would you spend it? Select up to two (% respondents) Travel 72 Hobbies/leisure activities 32 Spend more time with family 31 Taking on an advisory role in another business 14 Philanthropic activity 14 Setting up a new company 10 Taking on an operational role in another business Other, please specify I would never sell 26 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society What proportion of your wealth do/will you give to charitable causes? (% respondents) % of income annually % of estate on death 0% 14 44 1-5% 69 26 5-10% 13 14 10-30% 30-50% 50-75% 75-100% © The Economist Intelligence Unit Limited 2013 27 While every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in this white paper This report is sponsored by Lloyds TSB Private Banking Limited No representation, warranty or undertaking is given or made by Lloyds TSB Private Banking Limited as to the accuracy, reasonableness or completeness of the contents of this report including any opinions or projections expressed in it LONDON 20 Cabot Square London E14 4QW United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8500 E-mail: london@eiu.com NEW YORK 750 Third Avenue 5th Floor New York, NY 10017 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 1181/2 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Rue de l’Athénée 32 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com [...]... actively consider the social impact of my business 12 34 39 12 4 16 4 I actively consider the environmental impact of my business 11 35 35 I actively consider the financial impact of my business on the economy 14 24 36 © The Economist Intelligence Unit Limited 2013 35 10 6 Wealth creators Assessing the impact of UK entrepreneurs on society What are your greatest challenges when creating personal wealth. .. additional help from a qualified coach 16 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society Conclusion Wealth creators have faced major challenges over the past few difficult years, yet there is no sign of the taste for entrepreneurship dwindling in the UK indeed, it’s quite the reverse, as SME and start-up numbers continue to rise As they.. .Wealth creators Assessing the impact of UK entrepreneurs on society 2 Entrepreneurs and social responsibility Business owners have a strong sense that their role is an important one in social terms—93% of respondents believe that entrepreneurs make a positive contribution to society This conviction is most pronounced among those with more than £2m in personal investible assets (98%), and also among... Wealth creators Assessing the impact of UK entrepreneurs on society 3 The role of government Is there a mismatch between the positive perceptions of the role of wealth creators in society and the extent of formal support provided by the government for entrepreneurs starting out and existing businesses? minister Michael Fallon in October 2012 To that end, he cites the additional tax relief for angel... organisations or charitable causes Time is donated most generously by wealthier individuals (62% of those with more than £2m in personal assets), who may be less personally involved in the dayto-day operation of their companies Wealth creators Assessing the impact of UK entrepreneurs on society Chart 6 What are you currently doing to contribute to society? What did you do to contribute to society five... evident from the findings of the survey when respondents 12 © The Economist Intelligence Unit Limited 2013 14% 44% 26% 26% 1-5% 5-10% 13% 10-30% 3% 30-50% 50-75% 75-100% 14% 7% 0% 3% 0% 3% 0% 4% Source: The Economist Intelligence Unit 69% Wealth creators Assessing the impact of UK entrepreneurs on society Innovative social contributions Although there is a clear sense that SME owners have plenty on their plates... 2 Automotive 2 Consumer goods 2 Government/Public sector 2 Agriculture and agribusiness 1 Chemicals 1 Logistics and distribution 0 Other, please specify 0 © The Economist Intelligence Unit Limited 2013 21 Wealth creators Assessing the impact of UK entrepreneurs on society Which of the following has been the most significant source of your personal wealth? Select up to three (% respondents) Income from... another business 2 Other, please specify 2 I would never sell 2 26 © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society What proportion of your wealth do/will you give to charitable causes? (% respondents) % of income annually % of estate on death 0% 14 44 1-5% 69 26 5-10% 13 14 10-30% 3 7 30-50% 0 3 50-75% 0 3 75-100% 0 4 © The Economist Intelligence... with the university and other businesses,” he says They are likely to raise their own standing in the business community by doing so, but as he observes, “there is not necessarily a conflict in having some self-interest in following a particular course of apparently altruistic action” © The Economist Intelligence Unit Limited 2013 11 Wealth creators Assessing the impact of UK entrepreneurs on society. .. for children 7 13 Being able to contribute to the economy /society (eg, through employment, etc) 7 7 Being able to help others (eg, through philanthropy, etc) 4 9 Status 3 4 Other, please specify 2 3 © The Economist Intelligence Unit Limited 2013 23 Wealth creators Assessing the impact of UK entrepreneurs on society Which of the following factors do you believe have been the most influential in helping ... Wealth creators Assessing the impact of UK entrepreneurs on society The role of government Is there a mismatch between the positive perceptions of the role of wealth creators in society and the. .. Economist Intelligence Unit © The Economist Intelligence Unit Limited 2013 Wealth creators Assessing the impact of UK entrepreneurs on society The UK s wealth creators in profile The number of entrepreneurs. .. personally involved in the dayto-day operation of their companies Wealth creators Assessing the impact of UK entrepreneurs on society Chart What are you currently doing to contribute to society?