Travel Businesses Quickest Sector to Become Profitable, New Study Reveals

SumUp has surveyed 540 business owners around the UK to understand better what it takes to reach entrepreneurial success. From financial challenges to business issues, the survey sheds light on the reality of being an entrepreneur.

Over half of entrepreneurs (54%) have a profitable business between year one and two

Over half of businesses become profitable after their first year. The companies that make money the fastest are those within the travel and transport sector: 23% of entrepreneurs said their business was profitable within the first year and 100% within three years. IT and telecom companies make the least profit: only 2% made money after the first year.

The survey also asked entrepreneurs how much they invested at start-up. Most respondents (26%) invested between £1,000-£9,999; however, the companies that invested the most were architecture and building start-ups, where the initial cost was an average of £81,000. This compares to entrepreneurs with retail and catering businesses who invest an average of £12,115 at start-up, with the majority, 34%, investing between £10,000-£24,999.

The biggest challenge for entrepreneurs is having a lack of time to make their business succeed

The survey asked respondents to highlight the main challenges they have faced since being an entrepreneur. The graphic below shows the top five most prevalent.

Over 1 in 5 new businesses don’t use software to help run their business 

The majority of entrepreneurs (91%) make use of technology within their business. Primarily, new businesses rely upon technology less: 24% don’t use digital services, but by the time the business is four years old, this number decreases to just 3%. The most common use for digital tools and solutions was for company sales- over a quarter of respondents (26%) use technology for this.

What are the most enjoyable parts of being an entrepreneur?

The survey also asked entrepreneurs about their favourite parts of running a business and the top five most common answers.

Being your own boss

42% of entrepreneurs say this is the best part of running a company.

Seeing your business grow 

31% of respondents highlighted that seeing their business grow was the best part. Older entrepreneurs place more value on this: 47% of those aged 55+ highlighted this as the most enjoyable part compared to just 28% of 16-24-year-old entrepreneurs.

Freedom of choosing working hours 

Those aged 45–54 placed the most value on choosing working hours- 44% said this was the most enjoyable part of being an entrepreneur.

Creativity 

22% of entrepreneurs believe that being able to be creative, and setting their own boundaries and constraints, is the most enjoyable aspect.

Potential financial freedom 

20% of business owners find this the most attractive aspect of being an entrepreneur. 18% of those running a business for less than a year highlight this as enjoyable, increasing to 22% when the company is three years old.