So many new small businesses are starting that entrepreneurs fear their biggest business risk is competition.
Thousands of companies are starting every month – and a quarter of entrepreneurs worry that their rivals will snatch their share of the market.
Competition heads their list of concerns – others include dealing with red-tape (13%), the rising cost of raw materials (15%), a lack of funding (9%) and a shortage of skilled staff (8%).
Finding top talent is also linked to competition as more companies fight for a slice of the same market and compete for the best staff.
The figures were revealed in a study of more than 1,000 small businesses by commercial finance firm Bibby Financial Services.
Sound financial footing
CEO David Postings told specialist investment web site SEIS.co.uk: “The trend is certainly a lot better than a few years ago and shows that Britain is an ideal place to start a business and a happy hunting ground for entrepreneurs.
“Job losses and the recession have led far more entrepreneurs to go it alone and the change will boost the economy with more employment and increased output.”
Postings argued that entrepreneurs need to manage their businesses and finances better to put clear water between them and their rivals.
“Technology is definitely reducing the cost of entry and removing barriers for businesses in many markets,” Postings told SEIS.co.uk. “However, starting on a shoestring budget is not always a good idea as successful businesses need a sound financial footing to ensure they succeed in the longer term.”
Creatives lead the way
The scale of the competition faced by start-up businesses was disclosed in an announcement from Companies House.
The official register of companies listed more than 54,000 incorporations in the year to March 2014 – a trend of new businesses starting that has continued for some time.
The March figure was the most new corporate start-ups in a 12 month period for five years.
The Department for Culture, Media and Sport, has also released data showing how important Britain’s creative industries are to the economy.
Entrepreneurs starting creative and media businesses are outperforming every other sector.
The number of creative firms soared by 10% in 2013.
Alternative finance sources like crowdfunding and the Seed Enterprise Investment Scheme (SEIS) are fuelling this growth by making private equity finance easier to access at a time when the banks have stopped lending to entrepreneurs.
