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SURVEY: Shortage of money, information and self-confidence, obstacles for youngsters with business ideas
Three out of four young people consider the main reason for not succeeding in putting into practice their business ideas is the shortage of funds needed for the initial investment, according to a survey made by Startarium platform among people included in Startarium Crowdfunding Makeathon, a project devoted to financing through crowdfunding in Romania, carried out until December 15.
“Their perception comes in the context in which half of respondents say the amount they needed to turn their idea into business is no more than 20,000 euros. Other 21% estimate between 21,000 and 50,000 euros and the rest say it would exceed that level,”the survey shows.
Threw out of five entrepreneurs included in Startarium Crowdfunding Makeathon project who answered the survey say they have had the idea for which they were looking for financing through a crowdfunding campaign for at least a year. Besides the fund shortage for initiating the investment, the launch of the business was prevented by the lack of information which could help them put their ideas into practice (28%), by little confidence in their own forces (25%) and the lack of support (23%), time (21%) or of a business partner with whom they could share responsibilities and worries (7%).
At the same time, most respondents consider they are in an early business stage, so that obtaining financing from a bank is very difficult. Without a stimulating legal frame, which might support financing start-ups by the state/banks/investors and without too many investors ready to invest in just a business plan, their perception is they should start business with their own financial resources.
“Crowdfunding represents the right financing solution even for young people whose business is just a project. Although it is a very popular method at world level through which entrepreneurs can finance their ideas, two out of five respondents say they had not considered that method when looking for financing solutions or they did not know they had such an option”, the survey says.
28% considered they needed specialized support
Other 32% say the initiative of launching a crowdfunding campaign on their own was prevented by the little information about that crowdfunding supposes and how it could contribute to their business, while 28% considered they needed specialized support to look for financing through crowdfunding.
Most people are aware now that crowdfunding campaign could help them obtain a validation of their business idea, generating visibility for the product or service they would launch and even calibrate offer and prices to market reaction. By applying to Startarium Crowdfunding Makeathon they could benefit from resources they need for launching, the initiative bringing all resources, experts in various domains and the budget they need to start their own financing campaign through crowdfunding for their business.
Three out of ten respondents intend to reach annual sales of 100,000 euros in no more than a year, other four out of ten could reach that level in 2-3 years, while the rest estimate more than 3 years. Three quarters say that to increase their business they need up to 5 employees in the first year of business, and 11% expect to recruit up to ten employees, while at least 10% thing they can manage on their own, without employees.
“In fact, the lack of dedicated and competent human resources is the main risk factor that six out of ten respondents anticipate for the new business, followed by bureaucracy (40%), lack of fiscal stimulating for start-ups (36%), the high tax level (26%), legislative instability (23%).”
Six out of ten respondents aged between 19 and 35
Six out of ten respondents are aged between 19 and 35, two out of ten are between 35 and 45 years old, while the rest are over that age category. Eight out of ten are college graduates, while the most – about six out of ten- are entrepreneurs or freelancers, and a third work in a private company. Most of them are from Bucharest, while the others are from counties like Brasov, Cluj, Constanta, Ilfov, Iasi, Mures, Sibiu, Teleorman, Timis and Valcea.
Until now, 261 applicants have been included in Startarium Crowdfunding Makeathon held between August 19 and December 15. Of them about a quarter participated in the survey. Entrepreneurs have already started work, guided in preparing their own crowdfunding campaign. 28% of people included in that program said their business was in the idea stage, 32% are in the stage of prototype, 15% mentioned the product was ready but had not defined the business model, while 13% have an operational business, but want to bring something new. The main towns in which they want to implement their idea are Bucharest, Cluj Napoca, Timisoara, Iasi and Constanta.
The ten entrepreneurial initiatives which will complete the crowdfunding campaign will be announced on October 21. The ten entrepreneurs will be helped by 50 mentors, consultants, experts in digital marketing, designed and graphic artists, video producers, copywriters and media specialists, to support entrepreneurs develop a correct business plan and put it in application through crowdfunding campaigns.
Launched in 2016 under the umbrella of the metaphor “Entrepreneur City”Startarium is a platform for fresh entrepreneurs, an Impact Hub and ING initiative. Since its launching, Startarium has gathered a community of over 32,000 members and 50 mentors with whom entrepreneurs can work for free, has published over 350 materials and has opened financing access that exceeds 470,000 euros.