Unemployment prompts students to consider launching their own business

Some 76% of unemployed school leavers would consider starting up a business to be a viable option in the difficult job climate, a report by office supplies provider Viking has revealed.

The report questioned a thousand students who had recently left school or university on their personal views of startup businesses, and what they perceived to be the greatest difficulties in pursuing this type of career. One of the most startling statistics showed that more than two thirds of unemployed students had not received any careers advice concerning on how to set up a business, with most looking towards parents and other family members for information.

John O’Keeffe, commercial director at Viking, said: “There is clear evidence to suggest that students need greater support in explaining the options available to them before leaving school or university.”

With 2.65 million people unemployed in the UK, students in the North, where unemployment is most prevalent, considered starting up a business to be an “attractive prospect”. O’Keefe believes this to be indicative of the importance of business advice in schools.

“There is obviously a growing appetite for starting up a business and, as a company that has been supporting small businesses for 22 years, it is encouraging to see such optimism but from the research, it suggests there is a lack of awareness of where to seek advice and funding, with many choosing family and friends above anything else,” he said.

However, one of the biggest reported problems was the lack of necessary funds faced by most unemployed students in starting a new business.

In economic crisis, reduced consumer spending is impacting new startup businesses, causing low yield from the outset – when a company needs to establish itself financially. Even still, O’Keefe is optimistic that young entrepreneurs could still succeed.

“Many of today’s aspiring and entrepreneurial businesses were established by young people and it should be encouraged by schools and universities, especially in a time when jobs are lacking and unemployment remains high,” he said.

But it is important to remember that investors look towards the people behind the business, as well was the initial idea, for real experience and intelligence in the market. Viking’s report suggests many school leavers still lack the business know-how and product creativity to effectively run their own businesses.

Another cause of startup failure is a lack of staying power. Many small businesses do not have the money, time or resources to maintain their resilience in spite of setbacks to survive the trial and error period.

While the statistics for startup business success range from one third to one half, it is the consequence of failed business that may lead some schools to avoid offering careers advice in self-employment. Failed businesses can result in huge amounts of debt, and even bankruptcy.

Daisy Atkinson