One in ten business start-ups are founded by students

Recent survey results have shown that the number of student-founded businesses has increased by 54 percent in the last 12 months, with nearly one in ten businesses being started by students.

The online freelancing platform, PeoplePerHour, surveyed a total of 1689 new businesses from January to February of this year. The businesses had all been set up within the past 12 months.

The results suggest an increasing trend of undergraduate entrepreneurs looking to launch their careers while studying, with over a third (37 percent) having met their co-founder at university.

One of the main reasons cited for students starting their own businesses was the instability of the job market upon finishing their degrees, with 57 percent saying that a lack of job security influenced their decision regarding launching a business start-up.

Other factors included the incentive of earning extra money while studying, with 45 percent of those surveyed claiming that this was important. 34 percent said that they had always wanted to become self-employed by having their own business.

PeoplePerHour is a global online marketplace which connects freelance workers to businesses. Founded in 2007, it has over 350,000 registered users and enables freelancers to develop links with bigger businesses looking for certain specialist skills.

The survey also suggested that the ability to access the internet on mobiles and tablets has played an important role in giving students the flexibility to work on the go. 32 percent said they were able to fit in work hours between lectures, and 24 percent said they were able to do this while socialising.

In terms of the time it took the businesses to get started, 31 percent were launched within three months, it took three to six months for 29 percent of start-ups to get up and running, and for 28 percent it took six to 12 months. Just 12 percent of student businesses took over 12 months to get started.

The founder and CEO of PeoplePerHour, Xenios Thrasyvoulou, commented on the main reasons for the rise in student-founded businesses, saying: “A major factor in this growing trend of new small business owners across the younger generations is how cheap and easy it is to set up a business and build a client base from day one.

“The barriers of starting a business being lowered is one of the main reasons we’re seeing such a noticeable rise in students choosing the self employment route earlier than ever before.”

Second-year student Jessica Dale, who has experience of running a business, sees the advantages of being a student entrepreneur. She commented : “I decided to set up my business, Plush Pops, during my gap year as part of the Peter Jones Enterprise Academy Business School.

“It was exhilarating to know that at the age of 17 I was able to successfully run a profitable start-up and maintain all the business functions. Alongside studying Business Management at Warwick and running the business, I am able to adapt my skills and expertise to my studies to enhance my understanding of the business field.”

However, Carrie Barnsley, a second-year Education student, expressed concerns that some students might not understand the complexities of running a successful business.

She said: “I think it’s great if you want to start a business, but from what I’ve seen, a lot of students starting ‘businesses’ don’t actually know what it means to have one in terms of administration, such as taxes and registration.”