Building financial confidence and creating a generation of entrepreneurs

Small businesses are the champions of the economy. But too often low financial confidence prevents them from reaching the next level, whatever it means to them – whether it’s increasing profits, expanding or scaling.

Even worse, poor confidence can stop people starting up at all, even though they’re brimming with brilliant ideas. There’s often a stigma around asking for help, and a fear of figures can quickly turn people’s aspirations into what might feel like an impossible dream. It’s time to move past the myth of “not being a numbers person” and show that with the right support, it’s a skill anyone can unlock.

That’s why we brought together a group of experts from accountancy, business and education to form the Financial Confidence Taskforce. We’re calling for a radical rethink in how we build financial literacy and confidence to make sure the door to entrepreneurship is open for everyone.

The problem: too many businesses don’t know their numbers

Our recent research highlights the challenges facing businesses with 1-9 employees:

• 36% of owners don’t know if they made a profit last month
• 51% struggle with cash flow management
• 33% do not claim all the expenses they are eligible for
• 44% are caught off guard by unexpected costs
• 23% are not setting aside enough money to pay tax

So although we’re a nation of small businesses, we are not one that teaches people to be excited by entrepreneurship. We need to show people that running a business is an amazing and rewarding career.

Not enough in the classroom, and the classroom’s not enough

What is taught in school is a good start to the discussion. It can’t be the end of it.  Improving financial literacy isn’t just about classrooms. It’s about real-world experience.

The Financial Confidence Taskforce wants to answer one question: “how can we do more to support our existing and future small business owners and entrepreneurs?”  

A new approach: increase ambition, build knowledge and experience

We need a radical rethink. A new approach to solving this pressing challenge.  

To improve financial literacy and confidence we need to deliver practical experience beyond the classroom.  For people to ‘want it, know it, and do it’:

Want it: make enterprise aspirational, using role models to show what’s possible 

• Teach business and enterprise as well as personal finances in schools
• Make sure enterprise is recognised as a social good, highlighting its contribution to society and profiling it as a worthwhile life goal
• Promote inspiring role models that reflect the rewarding journey of entrepreneurship: you can’t be what you can’t see

Know it: give people the confidence to be able to unlock their numbers, using a variety of learning opportunities from employers to resources 

• Encourage employers, especially larger ones, to drive early-career financial skills training
• Embed business skills into all apprenticeships
• Promote the role of accountants and bookkeepers as financial business partners

Do it: turn confidence into capability. Real confidence comes from practice and repetition

• Offer real-world experience in schools and in businesses of all sizes
• Create national enterprise badge that testifies to a young person’s practical financial and business experience and position it as something valued by employers
• Build stronger long-term networks with advisors, accountants and bookkeepers, local business groups and mentors

A foundation in financial skills: making entrepreneurship viable, aspirational and equitable

Real progress depends on making entrepreneurship open to all. Everyone, wherever they start out, should have the chance to gain financial confidence.   This will equip them to turn their brilliant ideas into a thriving business. 

That means removing barriers and broadening access to practical experience. 

By inspiring ambition and giving people the tools to want it, know it and do it, we can create a more inclusive economy.  One where everyone, regardless of their background, has a chance to be part of the UK’s business success story.

You can read more of the Taskforce’s full recommendations here.