Would-be entrepreneurs in Wales are being put off from starting their own businesses because of the upcoming general election.

Research from online accounting software company FreeAgent suggest that, while the overwhelming majority of respondents have had thoughts of starting their own business at some point, 46% said their decision had been ‘significantly’ or ‘somewhat’ impacted by the prospect of a general election in 2024.

Prospective business owners also indicated they are concerned about the ongoing cost-of-living crisis, which has meant 62% of Welsh respondents have put off plans to start a business. Many business owners appear to have been impacted by the financial burdens of setting up a business, with almost a quarter (23%) of those surveyed noting that they were concerned with the potential budgets needed to set up a business, while 25% said rising energy bills was a particular worry.

With no date yet set for the upcoming general election, the uncertainty caused by potential political and legislative changes is making aspiring entrepreneurs nervous. More than a third (41%) of respondents said they have been put off from starting their own business due to uncertainty around changes in tax, with 21% worried about changes in small businesses funding and 38% more generally around changes in legislation and regulation with the potential entrance of a new government.

Despite these concerns, a third (35%) of Welsh respondents said they still hoped to set up a business within the next 12 months.

The reasons for doing so varied but focused on the following: 

• Achieving a better work/life balance (49%)
• The belief that they could earn more as their own boss (35%)
• A greater ability to fit work around family commitments (35%)
• Being able to choose the work done (27%)

The results mirror findings from previous years’ surveys, with the desire for a better work/life balance also coming out top in 2022 across the UK (chosen by 47% of respondents), closely followed by having greater choice over work tasks (chosen by 39% of respondents in 2022). Autonomy is clearly of great importance to today’s entrepreneurs as many feel restricted by routine workday boundaries but Wales was the most passionate about being able to fit work around family commitments.

When it comes to the success of their business, most aspiring Welsh entrepreneurs aren’t held back by a lack of confidence. Overall, 70% of survey respondents said that although they have moderate concerns about the potential failure of their business, they believe they can overcome these challenges. Over a third (35%) commented that they feel they have the necessary industry experience to start their own business.

In fact, Wales ranked as one of the top three places in the UK for high confidence levels among entrepreneurs in their own abilities and understanding to run a business (27%) after Greater London (33%) and the West Midlands (30%).

Roan Lavery,  CEO and co-founder of FreeAgent said,

“While it’s great to see that the overall appetite among the Welsh public to start their own businesses remains strong, it’s probably no surprise that political uncertainty is putting some people’s plans on hold.

“Many budding entrepreneurs are clearly considering the possibility that there may be big political and economic changes on the way, particularly if there is a change in government, and are waiting to make any concrete plans to start their own businesses. However, this uncertainty is only going to continue until we have some kind of clear indication over when the next election will actually be held – and what the various political parties’ priorities are for the small business sector.

“Although we may have to wait for the main parties to reveal their actual election manifesto pledges, I hope that they will start to give some indication over their plans for the small business sector. By having clarity over issues such as small business taxes, late payment and access to support, SMEs will be able to better plan for the future and would-be entrepreneurs will have more confidence in taking the plunge and setting up for themselves.

“It’s vital that everything possible is done to support this important part of the economy, so that it can lead the way to recovery in the coming years.”