Starting a business in tech isn’t easy, we all know that. Just look at the data and you’ll see that, unfortunately, most tech startups fail. Micro Miz Mag collated data from the UK Companies Register and found that there were 753,168 new start-ups in 2021-2022.
Based on previous years, we know around 92% of them will survive their first year. However, if we look at a five-year timeline, only 38% are expected to survive. This data, of course, covers all types of companies.
If we look at the tech sector, the picture is even less rosy. According to SPD Load data cited by Luisa Zhou, the failure rate is 80% for health tech startups, 60% for Edtech, and 50% for gaming.
Put simply, it’s hard to get a tech company off the ground and even harder to keep it going. However, that doesn’t mean it’s impossible. That’s why we’ve got dozens of articles on how to create a successful business and avoid many of the common pitfalls entrepreneurs often fall into. We won’t cover all the ground, but it’s worth recapping a few basics:
- Conduct market research prior to launch and continue to stay informed
- Write a comprehensive business plan
- Check your legal and financial obligations
Finding Talent Might Be Harder than You Think
Those are some of the fundamentals you need to cover when you’re starting a company, but there’s a lot more you’ll need to do. One thing that a lot of entrepreneurs often overlook, particularly when it comes to the UK market, is talent.
We’re not saying you can’t find tech talent in the UK. There are certain areas where British workers excel. A fact we can’t escape, however, is that we’re a small country.
Therefore, even if we can produce high-quality tech talent, it will be a lower number of people than in countries such as the US, India or China. Add to this the fact some people take jobs abroad, and finding workers isn’t always an easy task.
A 2023 report from Gigged.AI found that 72% of UK businesses have an interest in tech or are undertaking digital transformation projects. Of these companies, 30% say there is too much work and not enough people to do it. The report also found that 57% of respondents found that the tech talent shortage has increased since 2022.
Official data from the UK’s Chamber of Commerce supports this. As noted by the Financial Times, a government survey of 5,600 firms showed that 80% of those wanting to hire skilled and unskilled workers were experiencing difficulties.
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You Need Help to Close the Skills Gap
As someone wanting to set up a tech company, this is important information. You need to develop an effective recruitment strategy that takes into account local and, importantly, international talent. The former involves making connections with local businesses and academic institutions.
The latter requires the assistance of immigration lawyers. You can’t simply recruit people from abroad without going through official channels. The immigration lawyers at Reiss Edwards help a variety of tech companies bring skilled workers from abroad to their UK offices.
This help comes in many forms, including assessing whether your company has the necessary HR system in place to hire foreign workers and navigating the sponsor licence application process. There’s a lot of paperwork to get through and conditions to meet.
You don’t have time to think about these things too deeply if you’re setting up a tech company. That’s why you might need to outsource. People often overlook this part of the process but it’s something you need to get right if you want your startup to have workers who can get your company off the ground and keep it there.