We all want to see immediate results for our actions, but like I've said before: freelancing in the creative industry is more of a marathon than a sprint. Your business is like a living creature in the sense that it needs to learn and grow before it can survive on its own. It takes a lot of persevearance and hard work to make it through those first years, and once it's up and running, it takes a lot of persevearance and hard work to keep it alive. But even with all the patience and the sweat things can go wrong, which brings me to the question: why do freelance businesses fail?
According to the RSA Group, the UK’s largest commercial insurer, the UK has become a nation of micropreneurs, and the statistics seem to support this. The Department For Business Innovation & Skills show in their 2015 report that 99.3% of the private sector businesses were small businesses and 62% were sole proprietors. At first sight, these figures suggest that the UK is a great place to be a freelancer. And it's true, it is. But still, according to the Office for National Statistics, about 50% of the new small businesses don't make it to the 5-year mark. These doesn't necessarily mean failure, some of them might have voluntarily closed even if they were being successful, but for the purpose of this post I'm more concerned about the ones that actually failed.
So, what are the main barriers for small businesses to survive in the UK? Well, according to the RSA Group research, these are the most mentioned ones:
- The UK tax system
- Lack of bank lending
- Too much red tape
- The cost of running a business
- Late payments or cashflow
Which seems to prove that while we are striving to make our business grow by focusing on the quality of our product/service, its pricing, the market and the competition, we are not paying enough attention to other factors that can also bring our business down.
A successful business is not the one that sells more and grows faster, but the one that is sustainable in time. Maybe it's good to slow down from time to time and check how healthy our business really is before continuing with the race. See you at the finish line.
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