The firm, which specialises in advising family businesses, says the research from the Department of Trade and Industry (15 December), reveals that the degree of risk associated with starting a business is nowhere near as great as people perceive.

In fact, contrary to what many people think, over 80 per cent of new businesses survive their first year of trading.

“People also think it takes a long time to set up a business and this can also discourage them. In fact, most businesses are established within six months – with people, by and large, exceeding their anticipated income from the business in the first year.”

The research, from the DTI’s Small Business Service, was carried out as part of a nationwide communications plan to encourage people to consider starting a business.

It also showed that the rejection figures for business loan applications was significantly lower than people expected – between 10-20 per cent.

There are currently 4.3 million small businesses in the UK – 500,000 more than seven years ago. The Government is spending £60 million a year on enterprise education in school to encourage young people to regard entrepreneurship as a worthwhile career choice.

“Through the work we have done with Business Link, we believe the message is getting out there and that people are more prepared to take a risk,” says Hemant Amin. “However it is important that the degree of risk they perceive is the correct one and not over-inflated.”

You can contact Hemant Amin on 01635 521212 or hemant.amin@clmlaw.co.uk