An AXA study of 260 small business owners has revealed that little things really do mean a lot to SME owners when first setting up, with over two in five (41 per cent) admitting they would not have succeeded without the help, advice and support of family and friends.
Each small business entrepreneur receives an average of 574 hours of free support and advice from friends and family in their first year – worth a collective £2billion** and almost a third of the working year***
Two in five SME owners (41 per cent) admit they would not have succeeded without help from family and friends
Administration and IT support top the list of skills offered for free by loved ones
From property advice to PR, friends and family offer an average of 574 hours of free support and advice to each small business owner in the first year – that’s the equivalent of £3,931.48 in paid hours and almost a third of the working year.
Friends provided the equivalent of £2,309.79 in paid hours, 40 per cent more than family members who stumped up £1,621.70 worth of support.
The top ten skills offered by friends and family to SME owners:
Product or service sampling and feedback
Building and construction work
Website creation and design
Professional Financial/Accountancy advice
Putting their entrepreneurial skills into practice, SME owners resourced their business with 41 hours of free administrative support and 36 hours of free IT support from friends and family in the first year of business. They also received advice on more specialist subjects, with an average of 6.5 hours offered on professional legal consultancy and 5.4 hours on free insurance advice.
Monetary contributions from friends and family also play a part in getting a business off the ground, with family members investing nearly £900 in the first 12 months (£871). When it comes to financial support, family is key as friends only account for £100 of financial backing in the first year.
However, the research also highlights the importance of the little, non-commercial things that friends and family do which really mean a lot to budding entrepreneurs, with two in five small business owners (40 per cent) saying they received an average of 60 hours of emotional support and nearly three weeks of free childcare (20 days) from family members in year one.
Family and friends not only lend an ear or a shoulder to lean on, they are also one of the main reasons entrepreneurs decide to set up their business. One in five (21 per cent) cited encouragement from their family and friends as the top motivation to set up on their own, and one in eight (12 per cent) said they were inspired by a change in family requirements.
The little things that friends and family members have done to help start up businesses have not gone unnoticed, with almost one in five SME entrepreneurs (22 per cent) saying that they would take their supporters out for a nice meal to say thank you, and one in 25 (four per cent) even promising to take supporting friends and family members on holiday.
Darrell Sansom, Managing Director, AXA Business Insurance, commented:
“Setting up a business takes a lot of hard work and determination to succeed so little things that friends and family do to help out really mean a lot. It’s great to see SME owners are getting so much support from friends and family and tapping into their skills. When it comes to guidance on more niche areas such as insurance, it’s important that they also seek professional advice to make sure they have the right protection that’s tailored to meet their individual business needs.”