The Bank of Mum and Dad has been integral in funding the property sector, with one in four housing transactions in the UK reliant on funding from family. New research from Worldpay has found that family funding is also supporting the UK’s dynamic small business scene, with one in in ten entrepreneurs surveyed looking to their parents to invest in their business. In fact, Worldpay has uncovered that under-35s are twice as likely as older generations to ask for help from family to invest in their business, indicating that this may be a growing trend as younger generations increasingly aspire to become entrepreneurs.
In the UK, the number of self-employed young people has doubled since 2001 with research finding that 30 percent of millennials aspire to run their own business. One reason for this trend may be that Gen Y and Z view starting a business as an attractive alternative to attending university. Worldpay’s study of small business owners found that over a third of respondents felt that starting a business was a better investment than going to university – rising to 43 percent for millennials.
Jack Button, entrepreneur and owner of Jack’s Jetty Snacks is one such example: “I always had an entrepreneurial drive, so for me, setting up a business made more sense than going to university. Instead, I worked to build multiple sources of income, from an office job to renovating a flat, and moved in with my parents to save money. This hard work meant I had the funds to start my business. My parents and family were a huge part of this, helping me to decorate the café, serve customers, and lend a helping hand where needed – not to mention putting me up when I was saving. Having the support of my parents has been a big factor in the success of my business.”
Equally, with the start-up scene flourishing in the UK, traditional views of the world of work and career paths are shifting. Beverly Power, entrepreneur and founder of The Travelling Cupcake said: “I would hate for my children to be stuck in a mundane 9-5. I came from a background of entrepreneurs, so I would definitely help my children grow a business if that’s what they wanted to do. My oldest has already set up his own business, which I help with where I can! The point I always press with my children is that they can do anything they set their minds to. If that’s education then great, but if not, university can happen at any point in your life – it doesn’t have to be the first step.”
Steve Newton, Executive Vice President of UK and Europe, Worldpay, Inc. said “With the UK start-up scene defying economic uncertainty and growing over 5 percent this year, it’s clear that the UK has a strong entrepreneurial spirit. The challenge is to ensure that we’re creating the best environment and enabling access to the right support and tools for small businesses to succeed in the long term.”
“While it’s great if a business can be a family affair, not everyone will be in a position where this is possible. It’s imperative that aspiring entrepreneurs can access start up and working capital regardless of their background. Technology can be a great enabler for helping to foster this diversity by opening up new routes to finance that haven’t traditionally been available. Worldpay Business Finance is one of these – providing working capital to small businesses by giving them the flexibility to pay back the finance only when they are earning. We’re really proud to have funded over £100 million to UK small businesses since 2015. Our message to entrepreneurs is that it doesn’t matter who you are or where you come from, if you have a drive to grow a small business nothing should stop you”.