4 May 2011
Nearly 20% of Young Hong Kong People Running, Planning Businesses
HKTDC Survey Indicates Bright Future for City’s Young Entrepreneurs
The HKTDC and Hong Kong Federation of Youth Groups jointly conducted a survey between November 2010 and January 2011 to better understand the present status of entrepreneurship among young people. Entrepreneurship is closely related to the well-being of Hong Kong economy and the local employment situation, according to the researchers, who also noted that young people play a crucial role in small and medium-sized enterprises (SME) development.
In the first part of the survey, more than 1,000 local young people aged 18-35 were interviewed about their plans to operate their own businesses. The second part of the study reached more than 1,000 new entrepreneurs in business for less than 3 years as well as those who said they plan to operate their own businesses in the coming 3 years. The results indicated that 6 per cent of young people are operating their own business, and 11 per cent of respondents intend to start a business, according to HKTDC Assistant Chief Economist Daniel Poon.
"Among those who plan to operate their own business, more than one-third have been working on concrete business plans and expect to realise those plans within 3 years," said Mr Poon. "More than 60 per cent of the interviewees said they do not have a concrete business plan, but reported serious preparation work including collecting market information, looking for sources of capital and seeking advice from experienced entrepreneurs. This implies that their intentions and chances of operating their own businesses in future are considerably high."
The survey also asked why some respondents did not have concrete business plans. More than 80 per cent of interviewees said they lack capital while about half had insufficient knowledge or were unsure how to start. "Starting up is always the most difficult stage," said Mr Poon. "Preparation work such as raising enough capital and the sophisticated procedures involved with establishing a company, hinder many potential entrepreneurs from realising their plans," he said, adding that various organisations offer such assistance.
The survey found that young entrepreneurs and those planning to start a business are on average better-educated. Nevertheless, Mr Poon noted that about half of new entrepreneurs and would-be entrepreneurs are at matriculation level or below, which shows that not only those with higher education level possess the drive and ability to start their own business.
"Despite that fact that only 6 per cent of all interviewees operate their own business, the outlook for their businesses is positive," said Daniel Poon. Some 68 per cent of the new entrepreneurs reported that their businesses have managed to break even; 58 per cent said they have managed to recover the initial investment and their businesses had an encouraging outlook; and 86 per cent said their businesses are stable and growing. Nearly half of the respondents said they plan to expand their product and service range over the coming 12 months, while 44 per cent plan to employ more staff and 33 per cent intend to develop overseas markets.
Most of the new entrepreneurs (31 per cent) are involved in the retail business, mainly selling clothes, food and accessories. Some 22 per cent of respondents are providers of business services such as information technology, design and advertising, and about 13 per cent are involved with export trade of consumer products such as electronic goods, clothes and gifts. There are also new entrepreneurs offering personal services such as beauty care and wedding planning.
Regarding start-up capital, 38 per cent of new entrepreneurs said they invested HK$50,000 or below, while 31 per cent said the amount was between $50,000 and $200,000. Among would-be entrepreneurs, only 13 per cent plan to invest $50,000 or below, while 59 per cent anticipate investment between $50,000 and $200,000. "Anticipated investment among would-be entrepreneurs is higher than actual investment made by new entrepreneurs," said Mr Poon. "In other words, starting a new business may end up costing less than many expect."
The survey also found that entrepreneurs say their main challenges include keen competition among industry players, difficulty in developing new markets and garnering new buyers. "The Hong Kong market is relatively small and rental expenses are high," said Mr Poon, as he strongly encouraged entrepreneurs to develop mainland and overseas markets."
HKTDC Entrepreneur Day
HKTDC Deputy Executive Director Margaret Fong said the research reiterates the need for support for entrepreneurs in the preparation or start-up phase of business. "New companies need to have a handful of market information and make use of assistance available in order to strive for healthy growth," she said. "The HKTDC has a strong business network and rich experience in promoting trade. We understand companies’ needs and use our expertise to enhance trade and business of entrepreneurs and newly established SMEs."
"Last year, we launched the SME Start-up Programme to provide entrepreneurs and newly established companies with a one-stop platform gathering different types of supporting services," Ms Fong said. "Entrepreneur Day is one of the key activities of this Programme."
Entrepreneur Day, which is held 20-21 May at the Hong Kong Convention and Exhibition Centre (HKCEC) helps would-be and new entrepreneurs find the latest market information. The 2-day event organised by the HKTDC will feature more than 100 exhibitors and showcase business opportunities and support services. The event also features about 20 seminars, as well as successful case studies of seasoned entrepreneurs.
Participating organisations at the event will offer information on franchising, business intermediaries, online business, accounting, financing, legal advice as well as on information technology, management and entrepreneurship support. This year’s event will also feature a new Entrepreneur Lounge where company case studies and their popular products will be in the spotlight. The fair’s well-received "I want to be a boss" Attitude Analysis and entrepreneur consulting services will also return this year.
HKTDC Entrepreneur Day
|Date and Opening Hours:||20 May 11am-7pm
21 May 11am-6pm
|Venue:||Hall 1E, HKCEC|
Please contact the HKTDC's Corporate Communication Department:
Tel: (852) 2584 4216
About the HKTDC
A statutory body established in 1966, the Hong Kong Trade Development Council (HKTDC) is the international marketing arm for Hong Kong-based traders, manufacturers and service providers. With more than 40 global offices, including 11 on the Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business with China and throughout Asia. The HKTDC also organises trade fairs and business missions to connect companies with opportunities in Hong Kong and on the mainland, while providing information via trade publications, research reports and online. For more information, please visit: www.hktdc.com