This crisis of confidence is costing the UK over half a million potential business ventures that are not pursued.

Nationally, a lack of confidence remains a major barrier to entrepreneurship. Over four in 10 (41%) small business leaders say a lack of self-belief was one of the biggest obstacles to starting or growing their business. For more than a third (36%), fear of failure holds them back more than a lack of funding.

Young entrepreneurs are feeling the strain most acutely. Two in five (41%) 18–34-year-olds feel they are not the ‘right kind of person’ to run a business, compared to an average of 30% across all age groups. Nearly a quarter (23%) of 18–34-year-olds strongly agree with that statement, compared to just 2% of those aged over 55.

More than a third (37%) of small business leaders have delayed launching their business due to lack of confidence, rising sharply to 57% among 18–34-year-olds.

The impact is not limited to start up plans. Almost four in 10 (38%) leaders have either delayed pitching to clients, or not pitched at all, due to confidence issues – again rising to 57% among 18–34-year-olds. A similar proportion (38%) have delayed or decided against expanding or scaling their business because of a lack of belief in their own abilities.

Ayr entrepreneur takes action to back herself

One entrepreneur who chose to back herself despite doubts is Rachel Munro, founder of allergen-free bakery The Rebel Baker. Based in Ayr, the business produces over 10,000 cookies per day and supplies cafes and food service clients across the UK, with every product free from the 14 major allergens.

Before launching The Rebel Baker, Ms Munro ran a cafe and appeared on Gordon Ramsay’s Future Food Stars. As a single parent to a daughter with multiple food allergies, she was driven to create safe, high-quality treats that were previously hard to find.

Starting the business required significant risk and self-belief. Ms Munro invested heavily before securing guaranteed contracts, relying on her instincts and confidence in her product. Support from the Start Up Loans programme, including a £15,000 loan, helped her scale at a critical stage. Today, the bakery stocks over 20 cafes and is in talks with national retailers, proving that trusting yourself can pay off.

Ms Munro said: “Backing yourself doesn’t mean never feeling doubt – it means taking the leap anyway. I invested in my business before having guaranteed contracts, and it was risky and terrifying at times, but trusting my instincts completely changed the trajectory of The Rebel Baker.

“Confidence grows through action, not waiting for the perfect moment. Imposter syndrome and self-doubt are part of the journey, but they often mean you’re doing something that matters. The right support helps, and ultimately you have to believe in yourself and keep moving forward.”

Louise McCoy, managing director of Start Up Loans Products, British Business Bank, said: “At Start Up Loans, we believe in the power of ideas and the people behind them. Confidence should never be a barrier to pursuing your dreams.

“We’re encouraging entrepreneurs to back themselves – and we support them with developing a pre-application business plan and post-application mentoring.

“Like in other walks of life, new business owners are often affected by imposter syndrome. This is why we connect Start Up Loans recipients with mentors and provide other post loan support.”

With confidence and belief emerging as major barriers to entrepreneurship, Start Up Loans is encouraging aspiring business owners across the UK to back themselves and seek trusted, unbiased support.

For more information on setting up a business, Start Up Loans has updated its Business Resilience Guide, available to download for free here: Guide to Business Resilience | Start Up Loans