Terms of Reference
Purpose
The purpose of this dissertation was investigating the reasons start-ups in the United Kingdom struggle when trying to get off the ground and how different stakeholders can work together to prevent it from happening often. Business closure negatively affects the economy and the finances of the investor. Thus, there is need for stakeholders to develop strategies that can positively contribute to the growth and survival of start-ups.
Scope
The scope of the research was start-ups located in the United Kingdom. The new businesses had been operation between a period of one year to five years. Both the employees and business owners were targeted during collection of data.

Intended Outcomes
The intended outcomes included reasons that contribute to business failure such as customer influenced, competition, regulations, and non-unique products or services. Solutions would include examining the market for a niche before product launching.

Abstract
The purpose of this dissertation was to examine how businesses struggle to get off the ground and the prevention of it happening often in the United Kingdom. Across the UK 50 percent of the start-ups, fail in the first year of operations. Globally, 90% of the start-ups are closed because of numerous reasons among them funding problems. Currently, there exists no single legislation in the UK which can be said to have attributed to the failure of start-ups. There has been an increase in the number of new businesses launched from 2010 to 2016. Establishing of new enterprises in Britain is less challenging than having the business operate for a year. Majorly, the factors contributing to start-up failures include lack of funding, high taxation, lack of interest from consumers on the products or services, competition, lack of skilled employees, and failure to secure credit from banks. The literature review reveals that the number of new businesses that fail is similar to those succeeding. Failure of business owners to conduct market research and having low knowledge and understanding of the market increases the closure of the business.
The study adopted a mixed methodology where both quantitative and qualitative data were gathered for analysis. Qualitative data was collected using interviews. The interviews were conducted on three founders of the start-ups. On the other hand, quantitative data was gathered using structured questionnaires that covered different aspects of the topic. A pilot study was conducted to test the reliability and validity of the questions. Certain ethics were adhered to including confidentiality of the respondents and obtaining their consent. The findings revealed that start-up failures were caused by factors that could be mitigated with the help of government intervention. Moreover, conducting marketing research, and training employees on financial management can reduce the rate of new business failures. It has been recommended that the government should develop effective legislations to support start-ups in accessing credit.
Table of Contents
Terms of Reference 2
Abstract 3
Chapter 1 6
Introduction/Background 6
Background to topic 6
Background to company 8
Any historical aspect of problem 8
Any change in legislation leading to problem 9
Brief overview of structure of remainder of report 9
Chapter Two 10
Literature Review 10
Legislation guiding start-ups in the UK 16
Conclusion 18
Research Methodology 19
Research design and methodology 19
Philosophy 20
Research approach, and data collection 21
Research instrument and sampling technique and sample size 21
Data collection and analysis 22
Research ethics 23
Conclusion 24
Findings, Analysis and discussion 25
Comparison and discussion of results obtained from research method 34
Explain and justify any deductions made from data collected 37
Link findings back to literature review 37
Conclusion 38
Conclusion and Recommendation 39
Overall conclusions 39
Recommendations and justification for solution of problem 40
Usefulness of research to business 41
Evaluation 42
References 43
Appendices 46
Questionnaire 46
Interview Questions 50

Table of figures
Figure 1 Research Onion 18
Figure 1 Number of years employed 23
Figure 2 Possibility of start-up failure 24
Figure 3 Factors contributing to start-up failure 25
Figure 4 Government legislation 26
Figure 5 Barriers to start-up growth 27
Figure 6 Business Research 28
Figure 7 Financial Management 29
Figure 8 Business Location 30
Figure 9 Brexit 31

Chapter 1
Introduction/Background
Background to topic
The purpose of the present study is investigating the factors that affect start-up businesses in the United Kingdom and what strategies can be put in place to prevent their occasional failure. In 2016, the number of start up businesses in the UK reached a high where approximately 650,000 new enterprises were started a figure that was more than the previous year’s 608, 110 new ventures (Goldsmith, 2018). However, the start-ups launched in 2017 dropped to 589,000 which was a 10 percent drop (Goldsmith, 2018). The drop in 2017 was the first since the year 2010 and it was largely associated with the clampdown by the government on what has been popularly referred to as the “disguised employment” among the employees in the public service. Ironically, an analysis provided by the centre of entrepreneurs concluded that Brexit had no impact on the start-ups. Individuals were discouraged from seeking to invest in new businesses because of regulatory burdens and business rate rises introduced by the current government (Goldsmith, 2018).
According to Anderson (2014), approximately half of the new businesses established in the UK are unable to survive beyond the five-year mark the top reasons being cited being the complex tax system, high cost of running the business, and lack of bank lending. The survival rates for these new start-ups has been considered to be lower than before the 2008 financial crisis. One of the sectors that experience the greatest challenge is the construction where the chances of a new business surviving are estimated to be 44% as the government is responsible for cutting hold off most of the projects. On the other hand, the health sector’s chance of a start-up becoming established within five years is 56 percent. Anderson (2014) argues that while the United Kingdom is the best place for entrepreneurs who seek to invest in new businesses, it also happens to be among the worst due to low rates of survival. Among the problems faced by the owners of these businesses is inability to plan for the long-term once the projects are up and running. While in 2013 the economy of UK grew with 1.9% which was the fastest after the recession, conditions facing new businesses remained tough as accessing to finance was hard. Many of the small business start-ups depend on credit that is affordable to sustain their operations and growth. Nevertheless, the increase in interest rates provides a challenge to entrepreneurs making many UK enterprises micro in size- have zilch to nine employees (Anderson, 2014).
Among the cities in the UK with the lowest rate of survival among the start-ups is London. According to Nilsson (2017), only approximately 50.1% of the start-ups from 2013 carried on for three years which is 3.6% points below the country’s average. Nonetheless , this cannot be largely attributed to the capital having adverse business conditions. Often, many entrepreneurs are willing to take a risk by investing in London. On the other hand, the businesses which are able to make it in London become a success story. Due to this, London has been classified to have the highest rate of companies that experience accelerated growth- enterprises experience 20 percent growth in turnover and employees for not less than 3 years consecutively. One of the factors that drive growth for start-ups is setting businesses in areas that have a high population density in addition to accessing a workforce that is educated. Additionally, the funding from EU on infrastructure programmes and projects purposely created to help start-ups also contributed to their high-growth when established.
Background to company
Over the past decade, the definition of a start-up has varied depending on the motive of the defining entity. According to Robehmed (2013), a start-up can be referred to as a business which works to provide a solution to a particular problem and the outcome is opaque while there is no guarantee of success. One of the key attributes associated with start-ups is the ability to grow. Additionally, start-ups have high rates of failure, but the minority that achieve successes becomes reputable firms that become influential in the industry that they serve. Start-up enterprises can be in form of different sizes and forms. Theoretically, founders of start-up businesses are required to conduct a research for purposes of understanding ideas, business concepts, and the potential of surviving. The investors and the founders should sign a shareholders’ agreement that seeks to have them confirm the ownership, commitment and contributions and deal with intellectual assets and properties which might emerge from the start-up. To ensure that start-ups are lucrative and minimise the chances of failure, they should realign their internal characteristics such as products and management styles with the market environment.
Any historical aspect of problem
The failure of starts in the United Kingdom is not an isolated or a recent trend. Failure of start-ups has existed for decades and it is common globally. In particular, the failure rate globally is quite high. According to Patel (2014) globally, 90% of the start-up businesses fail which translates to nine out of ten. Historically, Griffith (2014) observed that out of 101 enterprises that became unsuccessful, the five factors that largely contributed to the failure were disinterest from the consumers on the service or product, cash or funding problems, staffing or personnel problems, high level of completion in the market, and finally challenges in placing a suitable price for the service or product offered. Patel (2014) mentions four characteristics of start-ups that have the possibility of succeeding. These characteristics include the product or service being perfect for the industry or market, the entrepreneur or founder fails to ignore even the basics, the enterprise experiences a rapid growth, and finally the team knows how and when to reinvent.
Any change in legislation leading to problem
There exists no single legislation that the United Kingdom government applies to start-ups and can be solely stated to be responsible for the high enterprise failure. While the tax system has been associated with contributing to the failure of the start-ups in addition to burden of regulations, they are applicable to every other business. Ironically, despite the high failure rates, UK’s legislation largely support the launching of start-ups and hence, the raise in new businesses from 2010 to 2016 (Goldsmith, 2018).
Brief overview of structure of remainder of report
The dissertation has been organised into six different sections. Specifically, these sections include the background, the literature review, methodology, findings, analysis and discussion, and finally conclusion and recommendation.

Chapter Two
Literature Review
` In 2017, the Small Business Administration (SBA) revealed that one fifth of all business start-ups failed during the first year while a third survived ten years and beyond (Sheppard 2018, p.3). Even though there are numerous conditions which could result in business failure, many small enterprises which fail still make the same mistakes. Reducing start-up failure is important because in many economies small and medium sized enterprises account for over 95 percent of all businesses (Yang et al. 2017, p.805).
During the past few years, the business start-up failure rate fluctuated from 75 to 90 percent depending on the industry and country. Indicatively, millions of start-ups were started each year and the ones that survived were still small which means that small and medium sized enterprises fail to scale over 10 million dollars of yearly revenue (Lee and Lee 2015, p.894). 42 percent of all start-ups failed because there was little or no need for their services or products in the market. Nevertheless, whenever small and medium sized businesses seek growth through technology, they normally fail to know the difference between innovation and creativity or ideas (Sheppard, M., 2018, p.20). Essentially, innovation and creativity cannot be equivalent because innovation has to create value which eventually generates income. Furthermore, innovation is more influential than ideas and creativity because ideas which generate income could be considered to be innovation (Sheppard, M., 2018, p.21).
In the beginning of the 20th century, there were different attempts aimed at enhancing efficiency in business operations and this led to the introduction of business management practices. One of the reasons cited for the failure of business start-ups is poor management. New start-up owners normally lack the relevant expertise of business management in areas like purchasing, finance, production, selling, and managing and hiring employees (Peel 2016, p.350). There have been few studies carried out which try to identify the main reasons behind start-up failure. According to Rostamkalaei and Freel (2016, p.260), data processing is considered as one of the major steps relating to the research on failure of start-ups.
In the UK, the rate of business failure is equal to the growth of business start-ups (Lee and Lee 2015, p.900). Even though there are increased rates in establishment of new businesses, there is only a 3.7 million total stock of businesses that have maintained their operations since the 1990s. The main reason is that the business closures remained relatively high. Many of the businesses that face closure are small or micro firms and they represent the most vulnerable and numerous sector in the economy (Hinks et al. 2015, p.89). Nonetheless, there have been minimal trials to investigate the numerous failed enterprises so that the reasons for their closures can be understood. In the same way, there is limited research focusing on owner-managers experiences during the process of closure which would have otherwise revealed differences between the businesses which close and the individuals who close them (Borissenko and Boschma 2017, p.76).
Financial consequences of business closure range from bad debts and insolvency to payoff for the business owner. Hornuf and Schmitt (2017, p.54) states that business which face insolvency are small in number in which 10 percent of all business closures are an outcome of bankruptcy or compulsory liquidation. However, not much is known concerning why other businesses close or whether their owners perceive the closing of their business as a show of failure or success. In other words, the occurrence of business closure has to be studied more including the responses, attitudes, and motivations of owner-managers that experience the procedure.
According to Peel (2016, p.351), 64 percent of all failed business start-ups only employed 10 people as compared to other major businesses in UK. Further statistics show that 80 percent of all business start-ups in the UK fail in the first year (Rostamkalaei and Freel 2016, p.260). Moreover, some of the reasons for their failure have been blamed on lack of attracting enough paying consumers and poor control of expenses. On the other hand, businesses that have strong digital or innovative skills usually become more successful and last longer (Yang et al. 2017, p.805). Sheppard (2018, p.17) believes that addressing and understanding why start-ups lack digital skills during the early phase can be an effective way to limit the rates of start-up failure.
Business failure is characterised mainly by poor business functions, their origination (externally or internally), whether they use operational or strategic options and if they are outside or in the businesses control (Peel 2016, p.360). Sheppard (2018, p.15) points out that the reasons for start-up failure include marketing, accounting, finance problems as well as other exogenous and endogenous factors and mannerisms of the start-up owner. Finance and accounting issues have frequently been pointed out as the main reason for start-up business failure.
In a different perspective, Borissenko and Boschma (2017, p.56) identified five ratios as the determinants of business failure within the United States, they include: retained earnings, insufficient working capital, poor sales and profits, and poor market value in relation to the debt ratio. However, use of the financial ratios to define the business start-up failure poses challenges because they are majorly the symptoms of failure and cannot yield satisfactory results (Hinks et al. 2015, p.68).
Peel (2016, p.350) argues that small and medium enterprise start-ups can last up to three years before they fail which presents the assumption that only few of them can succeed in the long run. He further claims that in the first year 25 percent of all business start-ups fail and by the 10th year the rate rises to 71 percent. Failure and success are defined differently in each company which means that a unified explanation of business failure cannot be placed. Therefore, business failure is normally defined by the consequences it presents like organisation mortality, death or exit, bankruptcy, organisational collapse, closure, decline, bought for the asset value, and sell-off (Borissenko and Boschma 2017, p.69).
Depending on the company goals, start-up failure could be considered if the situation commands that certain profit is not earned or if a particular problem is not solved. No matter the case, failure normally leads to the discontinuance of a business and its main purpose (Peel 2016, p.365). Irrespective of the situation, if start-up failure is described with regards to its consequences, the failure should be considered as a procedure that has origins, possible preventions and symptoms (Sheppard 2018, p.23).
Lee and Lee (2015, p.900) carried out a study and found that the owners of start-ups indicated that they failed because there was insufficient market need for services and products they provided. In addition, start-ups failed because of bad timing or focusing on an idea rather than incorporating ways of tackling a customer’s problem (Rostamkalaei and Freel 2016, p.260). Innovation focused researchers identified that poor management skills was a common reason that instigated start-up failure. Moreover, lack of experience, inability to incorporate change and absence of partnership and teamwork are also cited as reasons as to why start-ups fail.
According to Hinks et al. (2015, p.89), lack of competence is another reason why start-ups fail and this includes factors like emotional pricing (fixed pricing is disregarded on the basis of emotions rather than focusing on credible factors like competitor’s pricing), non-payment of taxes, unnecessary business costs, improper planning, lack of finance knowledge and lack of experience in record keeping. Hinks et al. (2015, p.89) also indicates that start-ups fail because of unbalanced experience and absence of managerial experience that eventually leads to irregular expansion, inadequate borrowing techniques and improper credit granting procedures. Rostamkalaei and Freel (2016, p.260) agree and point out that 11 percent of start-up failure is catalysed by lack of experience in services and goods (poor inventory, lack of knowledge of the suppliers, and inadequate advertising budget. On the other hand, a percentage of failed start-ups showed that it was as a result of disaster, fraud, and neglect.
In the UK, 44 percent of start-up failure is attributed to the government tax system, 38 percent to bank lending and 36 percent to late payments (Peel 2016, p.350). By 2013, the UK economy had grown by 1.9 percent and this was the fastest rate experienced ever since the 2008 recession. However, the economic conditions were still difficult because firms struggled to gain access to finances. By 2014, the Bank of England indicated that the general lending to small and medium enterprises through Government Funding for Lending program reduced by 400 million pounds within the year’s second quarter. The rise of interest rates presented a challenge for the start-ups in UK especially the ones that depended on the affordable credit. Additionally, Sheppard (2018, p.13) indicated that businesses in the UK were becoming smaller in size; they turned into micro businesses which have a maximum of nine employees and they account for 95 percent of the entire private sector. Ever since 2000, UK has seen an increase of 1.4 million micro-firms which is equivalent to 43 percent. As a result, the general economy of the UK has been affected because it depends on the small numbers of large businesses.
One of the ways in which start-ups may achieve success as opposed to failure is to carry out proper market research. Most of the start-up owners assume that inadequate funds constitute towards failure of their businesses, but, it has been revealed that research and planning are essential in ensuring that the business idea remains feasible and pricing remains competitive (Yang et al. 2017, p.811). According to Lee and Lee (2015, p.902), when starting a business one should invest more time carrying out research on the business idea and find out if there is a need for the services or products. Sufficient feedback from the customers should be taken into consideration because it may help the start-up attain a competitive advantage.
Alternately, Borissenko and Boschma (2017, p.103) suggest that financial management is important for any start-up business irrespective of its size. Insufficient capital or an improper contingency plan may lead to the business lacking growth potential. Therefore, businesses that do not seek professional advice could worsen their financial troubles. Peel (2016, p.352) argues that start-ups should market themselves sufficiently through proper marketing channels like establishing a website and using social media in order to push the objectives of the business forward. However, it is not possible to determine which one is more important than the other when it comes to avoiding start-up failure.
Sheppard (2018, p.12) insists that for the start-ups to gain success particularly in the UK they should target its digital marketplace because it is essential for them to gain access to the impartial information needed in digital marketing. Even before a start-up can make a final decision on the content that they intend to market online, it is important that they understand the essentials of how the search engines work, the ranking factors, and knowledge of social media. Basic knowledge will equip a start-up to access the online economy in UK as well as promote a business to a wider audience.
Evidently, the rate of business failure has increased and this is why a lot of research has been direct towards understanding why start-ups are failing at such a high rate. Researchers like Hinks et al (2015, p.98) have suggested models for predicting start-ups failure as well as alternative strategies that can be used for businesses heading towards failure. Nevertheless, the attitude of the start-up owners should be considered as well because they represent the way in which the business will execute its functions. In-depth research as to how and why start-ups fail should be done so that prevention measures can be identified.
Legislation guiding start-ups in the UK
According to Josh, (2010) one of the main considerations while starting a business is the legal structure. Legal structures have long term effects on the business and therefore, the owner of the business should think thoroughly on the decisions to make during start-up. The owner can choose from three legal structures which have different implications on the business and they include partnership, sole trader and a limited company. Businesses that cause risks to its employees or members of the public should consider licensing their businesses. Licensing the business depends on the nature of the business (Josh, 2010).
Disputes in the business with customers or employees may lead to negative results in the company. Therefore, the owner needs to have clear ‘Terms & Conditions’ for the business during start-up to enable them control such situations (Bytestart Limited, 2018). Businesses without terms and conditions may find out that they are operating on the worker’s or customer’s terms. When the business starts to get employees, it is important for the owner to know all the legal obligations for an employer in accordance to the United Kingdom government since the owner might answerto the employment tribunal.
Business owners who require to have staff in the business need to insure their businesses(Bytestart Limited, 2018). However, insurance is also important even without employees since there can be liabilities in the business at any given time. The insurance covers these liabilities and compensations on the workers who suffer while working due to illness or injury. Other insurance covers which should be considered by the employer are the public liability and professional indemnity. Although these covers are not legal, they protect the business from unnecessary compensations.
The employer should consider choosing pension schemes which invests on the employee’s pension. Moreover, most employees get stakes in various companies around the world due to auto enrollment and therefore, the owner should consider having pension schemes while starting their businesses(Josh, 2010). Managers are supposed to understand their roles and duties while dealing with the United Kingdom fire safety regulations since lack of following the laws could lead to serious consequences(Bytestart Limited, 2018). The owners should be aware of the legislation regarding fire safety which is incorporated in the Regulatory Reform. The reformprovides a clear guidance for the safety measures and procedures to take while dealing with fire issues.
Business activities might be risky to the health of individuals who are inside or outside the business premises according to (Josh, 2010). Therefore, the owner should assess the risks posed to the public or employees and take measures to ensure that they are safe. Business managers or owners have legal obligations of paying taxes to the government of UK. Some business owners overlook the requirement of paying VAT registration and therefore, they are forced to become VAT registered if the turnover exceeds the registration threshold(Bytestart Limited, 2018). Moreover, the government penalize owners who fail to register the VAT on time. Business owners are advised to seek help from professionals who can advise them on finance issues and tax payment before starting the business.
The owner needs to know what is on the top of their “to do” list while starting the business. Bytestart Limited, (2018) acknowledged that one of the things that business starters should consider is the auto enrolment. Additionally, auto enrolment is a legal duty for the owner and is a significant factor that benefits the staff.
Conclusion
In conclusion, the failure of start-ups across the United Kingdom is imminent and caused by specific widespread factors. Customers are critical to the growth and survival of the new businesses and for most start-ups, having products or services that attract consumers is challenging because of aspects such as complements and substitutes. Failure of start-ups has also been attributed to unfavourable UK taxation system. Thus, the government can play a significant role in reducing the number of start-ups that close business. On the other hand, there are success stories of new businesses that flourish and experience unprecedented growth. The literature review depicts that the number of start-ups that fail in the UK are equal to those that succeed. Ironically, there exists no single piece of legislation that can be said to have caused the increased failure. Often, it is a global problem.

Research Methodology
Research design and methodology
The study was done in accordance to a research onion developed by Saunders, Lewis, Thornhill, and Bristow (2015) who divided the methodology into various sub-sections to guide on the design as depicted in the diagram below.

Figure 1 Research Onion
Source: Saunders et al. (2015)
A complete thesis uses examples and information from previous research according to Fisher, Buglear, Lowry, Mutch, and Tansley (2010). Additionally, the thesis gets information from both secondary and primary sources which provides a holistic view of the various issues being investigated. The study literature was sourced from books, journals, and websites with start-up content and their fail rates that forms part of the secondary data used. Primary data used in the study was collected through questionnaires.
Philosophy
In the research onion, demonstrated above, the first layer is used to guide and show the respondents the philosophical approach used in the study. According to Saunders et al. (2015) research philosophy includes several assumptions which rely on the strategies implemented on the chosen design. Philosophy is the method used to collect information and data which is later analysed and presented in the research (Burell and Morgan 2017). The three epistemological approaches used in research philosophy are realism interpretivism and positivism. Positivism can be defined as the method used by a researcher to discover the causes of social events, facts or business in a research through logical reasoning. The reason the researcher facilitates replications while conducting the study is because it is the main cause for implementing the positivist approach and is highly structured (Gill and Johnson 2010, p. 7-11). Researchers prefer this approach since it prioritises on the quantifiable observations used while statistically analysing data. Therefore, the researcher used a positivist approach while carrying out this study since it can easily be used with quantitative analysis.
The realism philosophy is used to show that knowledge lies on the category of social creations since the method hardly uses the human knowledge. One of the similarities between realism and reality is that they are present with or without the availability of science and observations. Moreover, Blaikie (2007) noted that realism is noted when there is the availability of things and the behaviour they possess. Nevertheless, the realism approach can only be considered to be valid if the realities exist with or without proof. Finally, there is the interpretivism approach which is used in some studies. The method is important since it prioritises on actual people rather than other factors such as objects in the study. However, because this study relies on the use of quantitative methods, the realism and interpretivism approaches were not used since they are qualitative.
Research approach, and data collection
According to Collins and Hussey, (2013) some of the strategies which can be used while conducting a research include participative enquiries, case studies, grounded theories and cross-sectional studies. The main approaches used in this study are the survey and explanatory approaches. The survey method involved the researcher developing certain questions which were used to get information from targeted people. A major advantage in the use of survey method is that it increases the knowledge of the scholar in the field. An example of such a field is the social research.
Research instrument and sampling technique and sample size
The methods used in data collection in this research were questionnaires and interviews. The workers were selected through random sampling were from start-ups operating in the United Kingdom. The respondents were asked to fill a semi-structured questionnaire. Time was limited and therefore, the researcher arranged to conduct interviews with three business founders through online question and answer interview. Questionnaires were sent to company supervisors through the internet who then gave them to their workers. The main targets were the supervisors, employees, middle and senior managers. The survey method was put into practice in the exercise of calculating the sample sizes of the 15 organisations involved. The software showed a confidence level of 95% and a confidence interval of 4 which was included to show a sample size of 10 organisations which were randomly selected.

Choices of methodology open and why the particular one chosen
There are two methods that can be applied in a research project; quantitative methods or qualitative methods. Qualitative and quantitative analysis differ in the fact that experimental studies, predetermined objects and surveys are used to collect data in qualitative research while these methods are not used in quantitative research. Quantitative research involves quantification during the collection and analysis of data. Qualitative and quantitative researches have similarities which are shown in the following phases. Phase one shows that both approaches use similar ideas and assumptions which are used in the reviews considering the analysis and tests involved. Secondly, both methods use several options which show how the ideas and assumptions can be modified, clarified and sustained. The final phase shows that the two phases were used to come up with new assumptions and ideas while observing and evaluating information.
In this study, the researcher utilised both the qualitative and quantitative methods in what is referred to as mixed methodology. Mixed methodology was adopted because it enables the researcher to utilise the strength of each method while minimising the weaknesses.
Data collection and analysis
Primary data is the type of data collected when the researcher is involved. Bryman and Bell (2015) noted that primary data is mostly used to solve current issues in the study. Moreover, the data is also known as raw or first-hand data (Bryman and Bell 2015). The researcher used questionnaires to collect primary data and reached to the respondents through the internet. The main significance of primary data is that the researcher is present during data collection and therefore, he/she witnesses first-hand information. The researcher also evaluated reliability and validity of the questionnaires before giving them to the participants. Nonetheless, the process is referred to as the pilot study since it addresses certain questionnaire issues such as spelling errors, language used, quality and syntax of the questions. However, results from the pilot study are not included in the actual research. The researcher analysed data using the SPSS version 23 (IBM) after the completion of data collection and transferring it to the computer. The researcher recorded 67 questionnaires from 12 organisations. Thematic and content analysis were used to analyse the interviews with the start-up founders.
Research ethics
The respondents have certain ethical issues which need to be considered during the research. The researcher needed to ask for permission from the universities committee to conduct the study. The researcher also filled ethics form and also stated the duration for the study thereby showing integrity and professionalism while conducting the research (Saunders et al. 2015).Obtaining consent from the respondents was another necessity where the simple random technique was used. The researcher made it clear that participation in the study was voluntary and therefore, the details of the study were explained to all respondents so that only the willing respondents could sign the consent form. Another research ethics that needed to be considered is privacy and confidentiality. As a result, the researcher did not ask for the names of participants making them remained anonymous. The results from the study were marked as confidential to ensure that unauthorised people did not access them. Moreover, according to Bryman and Bell (2015), the researcher is the only individual who is authorised to access the respondent’s data.
Conclusion
In conclusion, the philosophy adopted in this research was positivist because it helps in discovering the causes of social events, facts or business via logical reasoning and in particular examine why start-ups fail and how it can be prevented. The survey research approach as adopted in addition to a mixed methodology of both quantitative and qualitative methods. Interviews and questionnaires were the instruments used for data collection. Respondents were randomly picked and the reliability and validity was tested using a pilot study.

Findings, Analysis and discussion
The results presented below are from 12 organisations whose employees participated in the research. Additionally, 67 questionnaires have been used in the analysis. The 67 questionnaires were the valid and fully filled and hence appropriate for use in the research.
How old have you been employed in this business?

Figure 1 Number of years employed
Source: Author (2018)
In this question, the respondents were asked the number of years they had been employed in their present workplace. The start-ups involved in the research had not existed for more than five years. From the graph shown in figure one, 21 of the employees representing 31.3 percent of the total respondents had worked for a period between 6 months and 1 year. The least number of workforce had worked for more than 4 years. The rest of the employees had worked for less than 6 months, between 1 and 2 years, and between 2 and 3 years.

According to your opinion, during your employment time here, to what extent can you say the business ever experienced possibility of failure?

Figure 2 Possibility of start-up failure
Source: Author (2018)
The aim of this question was to examine from the perspective of the employees if the start-up business was at a single time facing distinction because of an external or internal problem. 26 of the respondents which translates to 38.8 of the total participants felt that their current workplace faced a possibility of failure. On the other hand, 29.9 percent which is 20 of the respondents felt that the start-up business did not face any possibility of failure during their time at the organisation. 7 other respondents selected there was less possibility while the remaining 14 felt the enterprise faced high possibility of closure.

Based on the factors provided below, which are likely to contribute to the start-up failure?

Figure 3 Factors contributing to start-up failure
Source: Author (2018)
In the figure 3 above, the results shown depict the answers of the respondents when asked to select a factor that they felt would highly contribute to failure of the start-ups. The factors provided as choices included lack of consumer interest in product, funding problems, personnel challenges, competition, and pricing problems. The results depict that many of the research participants, 21 representing 31.3% felt lack of consumer interest in the product or service could largely contribute to business closure. The second factor chosen by many respondents was funding problems followed by level of competition. Pricing problems was the least selected meaning participants saw it cause less threat of contributing to failure.

Rate your satisfaction on the role government legislations play in supporting the business.

Figure 4 Government legislation
Source: Author (2018)
The figure 4 above displays the responses from the research participants on their satisfaction towards the role government legislations play in supporting the start-up businesses. 19 of the respondents were satisfied, 12 representing 17.9% remained neutral while 9 were strongly satisfied. However, the remaining respondents were dissatisfied (14) and strongly dissatisfied (13) on the current pieces of legislation ability to offer the necessary support to start-ups for their growth and survival.

Please pick one factor that you consider a barrier to growth of the enterprise.

Figure 5 Barriers to start-up growth
Source: Author (2018)
In the above figure 5, the views of the respondents on the barriers that hinder growth of start-up businesses has been presented numerically. The factors that act as a barrier include tax system, lack of bank lending, cost of running business, cash flow issues, and high costs of energy. The results shown above depicts that 21 of the respondents felt the UK tax system was a hindrance to the survival and growth of start-ups. The second factor that respondents felt it was largely negatively influencing the business growth was challenges in accessing loans from banks. Only 7 of the respondents felt high energy costs was a barrier to start-up growth.

Previously, has the start-up been involved in a research to understand the nature of the market?

Figure 6 Business Research
Source: Author (2018)
In the above pie chart, the results from the responses of the participants on the question whether their businesses had conducted a business research to understand the market are shown. From the above, only 24% of the respondents agreed to their businesses engaging in a research to gain knowledge on the market they operate in. 76% of the remaining respondents stated that no research had been carried out in their workplace.

To what extent do you agree the need for training employees on financial management?

Figure 7 Financial Management
Source: Author (2018)
There was need to ask the respondents on whether they felt training of employees in start-ups on financial management was critical. Majority of these participants (44) agreed to the need to be trained on financial management, 10 were undecided while 13 disagreed.
Are you satisfied with the location the business currently occupies?

Figure 8 Business Location
Source: Author (2018)
In the above figure 8, the results from the responses on the question if respondents were satisfied with the location the business currently occupies are shown. The outcomes of the question were mixed where some employees felt the current business location was not attractive while others approved it. Twenty-three of the respondents and 16 of them were strongly satisfied and satisfied respectively. On the other hand, an equal number was strongly dissatisfied and dissatisfied.
To what extent do you agree Brexit will negatively affect the operations of your start-up business?

Figure 9 Brexit
Source: Author (2018)
Finally, the respondents were asked to provide their views on the possibility of Brexit affecting start-ups negatively. Majority of the research participants (31.3%) were undecided while 24 agreed and 22 disagreed.
Analysis of Founder’s interviews
What largely contributes to failure of start-ups?
The three founders who were interviewed mentioned that in the United Kingdom the major factors contributing to start-up failure were complicated tax system that did not favour new businesses, increased competition, inability to secure credit from banks, and low support from the available government laws and regulations. Two of the founders interviewed had previously been engaged in businesses which they had closed because of financial burdens. According to the interviews, failure starts from when the business is unable to attract customers. In other words, they stated that failure of the customers having interest in what is offered to them and inability to reinvent by adopting a new business models often caused by funding challenges leads to business closure.
What can be done to minimise the high rate of start-up failures?
The founders repeatedly stated that the government was critical to reducing the rate of start-up failures. None of them had mentioned their input towards failure prevention. However, upon mentioning that they needed to conduct business research before launching and training their employees on aspects such as financial management, they too acknowledged they would play a critical part in achieving success of the new businesses.
Comparison and discussion of results obtained from research method
The results obtained from the primary quantitative and qualitative methods that were used to gather data through interviews and questionnaires depict that failure of start-up businesses in the United Kingdom has been largely contributed by a number of factors. Moreover, start-ups have an opportunity to decrease the chances of failure by ensuring they make the right investments. According to the results, the possibility of start-up failure in the UK is high. Majority of the respondents felt that at one time their businesses were faced by challenges that could highly cause closure of operations. Thus, start-up enterprises should be cautious in their operations considering they operate in a region where history dictates failure can be imminent. Employees and the owners should work in tandem to design strategies that make the business products or services more sellable. In addition, the findings depict that factors that largely contribute to the failure of start-ups include lack of consumer interest in product, funding problems, personnel challenges, competition, and pricing problems. Specifically, lack of consumer interest in the service or products offered was selected to be the major contributing factor to failure. As a result, start-ups should design products and services that are unique and at the same time attractive in the eyes of the consumer. Poor quality products or services is a catalyst to the business facing other factors such as increased competition, inability to put the right price, and failure to attract skilled personnel. Founders of start-ups should spend a considerable time assessing the service or product before making a decision to launch it.
Thirdly, the findings revealed that while the present government legislation might be supportive of start-up companies, some respondents felt that more needed to be done. Considering that launching a new business in the UK is easy, the government should seek to introduce further legislations that boost the operations and growth of start-ups. The high rate of failure means there is a lacuna in the present laws and regulations. The input of the government should be specifically on the barriers limiting the growth of start-ups as identified in the study including having a complex tax system, lack of bank lending, cost of running business, cash flow issues, and high costs of energy. The results depicted that non-availability of bank loans and a complex system are the largest contributors to diminishing business growth. Consequently, the government has a role of providing a safe environment that supports business maturity. New legislations ought to be developed specifically targeting start-ups in a manner that they are not highly taxed and makes it easier for the owners to access bank lending. The findings of the study depicted that most of the star-up enterprises had not been previously engaged in a business research that would allow increased understanding of the market and industry before operations. Business research is important for start-ups as it helps to increase the knowledge of the founders which as a result enables making informed decisions. For instance, a business research would help the owners know the number of competitors, how many similar business concepts have failed before, the most appropriate pricing strategy, as well as the preferences and tastes of the consumers. Conducting business research should be prior to launching the start-up. However, in cases where this was not done, the enterprise should carry out the research today rather than waiting for the moment challenges will be experienced.
The findings also revealed that financial management is a key factor that can help prevent failure of start-ups. However, not all employees were for the idea of undertaking training on financial management. Nevertheless, the importance of financial management to any business cannot be understated. There are many start-ups which fail because of the inability to manage capital in the right manner. Owners should invest in their employees by ensuring they undergo mandatory financial management training including other programs that can enhance the usage of funds within the business. The result also shows that the location of the start-ups is critical to achieving success. Some respondents felt that the current location of their businesses was not suitable. The suitability of a business location is determined by ease of accessibility by consumers, a busy or largely populated area, and a unique area with few or no competitors. The start-up location should be identified before the launch. Multiple areas should be considered and the one that provides a head start in terms of attracting consumers should be selected. Finally, the respondents were asked on the chances of Brexit affecting the operations of the start-ups. The European Union investments have largely contributed to the growth of new businesses. Considering the UK voted not to be a member of the EU, businesses set up in cities such as London might be affected once Brexit is implemented fully. While some respondents felt it would have negative impacts on the start-ups, others were confident nothing major would affect their operations. Nonetheless, it remains a mystery on the real impact on UK businesses not only start-ups but also small and large firms.
Explain and justify any deductions made from data collected
The major deductions made from the data collected include the fact that the failure of start-ups can be mitigated to smaller levels. While many of these start-ups face closure within three years after launching, there those that excel. Lessons should be drawn from those that succeed and appropriate strategies developed to help steer the growth of new businesses. Additionally, while the government has made vital steps in encouraging the launch of new enterprises, the same cannot be said on the efforts towards supporting already operating start-ups. New regulations and laws are needed to mitigate against barriers and factors that negatively impact on the start-ups. Nonetheless, the prevention of start-ups from failing principally remains on the part of the founders. Making investments in business research, adopting new technologies, and ensuring employees have adequate training on financial management and other operating components could be vital in achieving business growth.
Link findings back to literature review
The findings depicts that some respondents felt Brexit would have a negative effect on the start-ups while others were positive. Goldsmith, (2018) mentioned that Brexit would have no impact on the operations of organisations. On the other hand, in his research, Anderson (2014) concluded that many start-ups failed before five years the major contributing factors being a complex tax system that does not favour new businesses as well as inability to accessing business loans from banks. These findings coincide with what many respondents felt. Many new businesses owners depend on credit for operations. Thus, failure to access loans from banks makes it hard to survive in particular when the capital had been exhausted. The results in a research by Griffith (2014) depicted that failure of customers becoming attracted to services or products offered and funding problems primarily contribute to poor rates of survival among the start-ups. Consequently, the findings of this research revealed the same aspects. According to Hornuf and Schmitt (2017, p. 54) a sizeable number of new businesses face closure because of being declared bankrupt. Rostamkalaei and Freel (2016, p.260) observed that many of the start-ups in the UK failed in their first year and hence the need to conduct a business research that improves the knowledge of the founders on the market status. Yang et al. (2017, p.805) acknowledges that businesses that adopt the right digital and innovative strategies have high chances of surviving in the market. A research offers sufficient feedback from potential consumers. The acquired information can be used to improve the strategic plan for the new business.
Conclusion
In conclusion, the findings from the 67 respondents were presented using graphs, percentages, and frequencies. The 67 questionnaires were from 12 organisations whose employees had completely filled them for analysis. The findings shows that there is no doubt that start-ups failure in the United Kingdom is prevalent. Organisation owners need to do more to increase the chances of their businesses surviving. Ideally, having a competing edge is important for every enterprise. Much of the findings coincide with the results.

Conclusion and Recommendation
Overall conclusions
There are several conclusions which can be derived from the results presented above. The first conclusion is that start-up failure in the United Kingdom is common and many businesses close during their first year of operation. Some of the factors and barriers that contribute to the new business failure include complex tax system, failure to secure loans from banks, facing increased competition, and inability of current regulations to offer relevant support. Additionally, start-ups are affected by competition, poor pricing decisions, lack of market knowledge, disinterest of the consumers on the products or services offered, funding problems, and finally failing to attract skilled employees. The number of businesses that are successful in the United Kingdom are equal to those that fail. Thus, the government has a duty of designing new laws that seek to offer the necessary support to new enterprises. The failure of start-ups has been a historical problem. Stakeholders should converge to find a lasting solution to this problem. Considering UK’s engagement in negotiations due to Brexit, it might be the right time to have a candid discussion on what ails start-ups and how the challenges can be solved internally. Success of the business could positively contribute to the economy. However, closure of the business leads to wastage of resources and reduction in employment opportunities. Through the research findings, it is also concluded that business research is fundamental for start-ups before they are launched. Business owners have a duty to ensure that they have all the facts before starting operations. These facts can only be acquired through a prior research. It has also been concluded that financial management is imperative in preventing the failure of start-ups. Employees should be trained on financial management skills, as they are critical in utilising the available resources in an efficient manner. Finally, the location of the business determines the survival and growth of the new businesses. Start-ups that are located in an attractive place build a large customer base. Thus, when the products or services offered are quality and satisfactory to the customers, they quickly become loyal.
Recommendations and justification for solution of problem
Based on the above conclusions, a number of recommendations can be made for consideration by the relevant parties. First, the government should be in the forefront of providing a long-lasting solution to the problem through creation of legislations that ease the way of conducting business. While the current laws and regulations support launching of new business, they have been unable to be catalysts that propel the new businesses to achieve success. The gaps in the laws or regulations are visible considering many start-ups face closure in the first year of operation. Thus, the government should design laws that relax taxation for start-ups, and make it easier for new businesses to access loans from banks. Taxation and funding have been cited as major factors contributing to the start-up failures. Secondly, it is recommended that business owners or founders should spearhead the operations of the start-up until substantial growth has been achieved. What this means is that they should conduct a business research before launching the business to allow collection of feedback that enables making relevant adjustments to the service or product. Business owners should not trust employees to have their businesses build from scratch to success. Alternatively, they should empower employees by offering them relevant training on aspects such as customer service and financial management. In addition, considering many new businesses depends on credit, business founders should source enough funds before launching the product or service. They should be aware of the challenges of accessing credit and put mitigating strategies that might prevent closure of the enterprise. Finally, it is recommended that business owners should launch or invest in projects that are unique to the market. To do so, founders should source for innovative ideas that customers find ease in identifying with. Competition and lack of competitive advantage largely contributes to failure of new businesses.
The major stakeholders in the success of the business are government and the owners. Thus, the solutions should emanate from them.
Usefulness of research to business
The research conducted is useful to the business community in UK and other parts of the globe. Today, while 50 percent of start-ups fail in the UK, 90% are deemed to fail globally. Thus, the findings of the research are far reaching. Huge resources both time and finances are spent in preparing and launching new businesses. Business owners across the world deserve to know what contributes to start-up failures and what could be done to prevent closures. Utilisation of the findings of the study will be critical towards growth of business in the UK and having them contribute towards the economy. When business thrives, hundreds of job opportunities are created which reduces the rates of unemployment.
Evaluation
The successful features of the dissertation include the ability to have the chosen research methods gather the right data for analysis and conclusion making. Additionally, the dissertation was completed as scheduled and all sections provided in the guidelines included. Another success of the dissertation is acquiring more knowledge on the topic as well as research skills. Nonetheless, the unsuccessful feature in the dissertation could be the inability to include a large sample size to fill the questionnaires and conduct interviews. The research skills gained that could be applied in future research project include the use of Microsoft Excel. Additionally, the rate and accuracy of typing on Microsoft Word increased significantly. Other skills include proofreading skills, and researching skills. Searching for the secondary sources of data was critical in shaping the skills of researching helpful articles that are valuable on the internet. In future, conducting a similar research project would consume less time.
Among the difficulties encountered included arriving to a conclusion on the relevant topic for the research project. Choosing a research topic proved a difficult task. However, the issue was overcome by having numerous topics and researching for materials online for each and picking the one with up-to-date information. Another challenge was on the research methods to adopt. However, the schedule of the dissertation and the availability of start-ups businesses to engage in the study guided in selecting a mixed methodology. What could have been done differently for better or improved results is engaging more respondents to fill the questionnaires and more founders to interview. A wide range of information could have lead to better results. Time management when conducting the research is critical considering that there is a predetermined schedule provided by the University in terms of submission. Failure to manage time appropriately can lead to a hurried research and hence inconclusive findings. Finally, reliability of data collected is vital for ensuring that accurate information was gathered and thus, conclusion and recommendation made reflect the true state of affairs.

References
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Appendices
Questionnaire
How old have you been employed in this business?
Less than 6 Months
6 months to 1 year
1 year to 2 years
2 years to 3 years
More than 4 years

According to your opinion, during your employment time here, to what extent can you say the business ever experienced possibility of failure?
Less possibility
Possible
High possibility
None at all

Based on the factors provided below, which are likely to contribute to the start-up failure?
Lack of consumer interest in product
Funding problems
Personnel problems
Competition rivalry
Pricing problems

Rate your satisfaction on the role government legislations play in supporting the business.
Strongly dissatisfied
Dissatisfied
Neutral
Satisfied
Strongly satisfied

Please pick one factor that you consider a barrier to growth of the enterprise.
Tax system
Lack of bank lending
Cost of running the business
Cash flow issues
High costs of energy

Previously, has the start-up been involved in a research to understand the nature of the market?
Yes
No

To what extent do you agree the need for training employees on financial management?
Strongly agree
Agree
Undecided
Disagree
Strongly disagree

Are you satisfied with the location the business currently occupies?
Strongly dissatisfied
Dissatisfied
Less satisfied
Satisfied
Strongly satisfied

To what extent do you agree Brexit will negatively affect the operations of your start-up business?
Strongly agree
Agree
Undecided
Disagree
Strongly disagree

Interview Questions
What largely contributes to failure of start-ups?
What can be done to minimise the high rate of start-up failures?