R Burn Callander Daily Telegraph

A lack of start-up capital and a working class background are no barrier to  becoming an entrepreneur.   According to new data from information services firm Experian, more first-time   entrepreneurs are starting businesses than ever before, and these debut   directors tend to come from less affluent backgrounds than the entrepreneurs   of yesteryear.

A third of the first-time business owners that started a company last year had   a household income of less than £25,000 a year, the report showed, up from   less than a quarter in 2009.  Some 7.7pc of these new businesses owners live in social housing, more than   double the 2009 figure, suggesting that the modern entrepreneur is less   likely to rely on assets such as their homes to raise start-up capital.  Most of these new entrepreneurs are “bootstrappers”, the report found,   starting their companies on a shoestring budget. Almost 93pc launched their   businesses with less than £1,000.  Fewer people are tapping into their savings to launch companies, which may be down   in part to the changing age demographic of UK entrepreneurs.  A decade ago, the average entrepreneur was a white male in his early forties.   However, a study by insurance broker Simply Business has found that the age   groups that are most likely to start a business are now 18-24 years and   25-34 years, based on three years of data between 2007 and 2010.

“These figures suggest a shift in how we should view the average UK   entrepreneur,” said Max Firth, UK managing director for Experian Business   Information Services. “It’s not all high-tech start-ups and Dragons’   Den-style big ideas.  “An increasing proportion of new business directors are making the most of the   lower start-up entry levels; grabbing a mobile phone, a laptop and a   flexible workplace, and creating their own jobs and their own opportunities.”

More than 500,000 businesses were created in the UK last year, up almost 10pc   on the year before. Debut directors currently make up 59pc of start-up   bosses in the UK.  The proportion of first-time directors has risen 13pc year-on-year.

However, the poorer the first-time director, the lower the start-ups chances of survival.  While business survival rates are rising on average year-on-year, from 76pc in   2009, to 87pc in 2011, the likelihood of a start-up staying in business   after two years drops to 84pc for those from less affluent backgrounds.  “Some may still lack the experience, capital and contacts needed to survive   those first few tricky years,” commented Mr Firth.

In 2009, a report from the Kauffman Foundation, which studies the habits of   entrepreneurs, found that the majority of start-ups were launched by people   from middle income families. It too debunked the idea that the super rich   were more likely to start companies. Less than 1pc came from extremely rich  backgrounds.  However, less than 1pc came from very poor backgrounds.