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The only data I can get is this: https://www.kauffman.org/what-we-do/research/2009/04/education-and-tech-entrepreneurship https://www.kauffman.org/what-we-do/re

The only data I can get is this: https://www.kauffman.org/what-we-do/research/2009/04/education-and-tech-entrepreneurship https://www.kauffman.org/what-we-do/research/2009/04/educati... 93% had a degree, with 30% having a masters, That would suggest to me that you'd need a decent wedge of cash. Now, what is interesting, is that in 2016 at least, the US created gross 960k new companies (there is some smoothing here, so +- 100k) The UK created 460k. Seeing as how the UK is 60 million, versus 300 million people, either the US is under performing, or the UK is wildly over performing. (https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf https://www.sba.gov/sites/default/files/advocacy/2018-Small-... and https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf https://researchbriefings.files.parliament.uk/documents/SN06... for stats) Perhaps, as we don't have to worry about healthcare or no competes, that might be a factor.

rahimnathwani 7y ago
Registering a company in the UK, and keeping it running, is both simpler and cheaper than in the US. Registering a company takes a few minutes and costs less than $30. Compulsory annual filing costs less than $20. If your company's revenue is below some threshold, you don't need to register for VAT (similar to sales tax). And there's another (even higher) threshold below which you can file very simple annual accounts (unaudited, and including neither income statements nor cash flow).
- StavrosK 7y ago
  Agreed, I founded a UK company on a whim one day so I can bill for some freelancing work. It made a few thousand a year and everything was hassle-free, basically "pay $50/yr and file some stuff that tells us you're active, and when you get large enough to afford a good accountant they'll take care of it".
- dsfyu404ed 7y ago
  Based on those differences I'd wager that a lot more people in the UK would register their side gigs whereas in the US the trade-offs are rarely worth it unless you intend to make it a "legitimate business" at some point.
- brianwawok 7y ago
  Eh, in my state in the US it is like $85 every 2 years for a LLC and essentially no paperwork if a simple pass-thru. Not everyone needs a Delaware C-Corp from day 1.
  - Reedx 7y ago
    Nice. That's a lot simpler than CA. Here there's paperwork, more complicated taxes and $800/yr for a single-member LLC.
- vonmoltke 7y ago
  That's about the process in Texas. Incorporating is a different story, but you don't have to incorporate to register a business (and it's probably a waste of money if you are the sole owner with no employees).
  - rahimnathwani 7y ago
    Does the simpler option provide limited liability?
pjc50 7y ago
The UK also makes company formation very easy and still slightly advantageous for sole traders, which may be a factor. I did check the criteria and they do include "must be listed for VAT or PAYE", so they're all real businesses to some extent and not just shells. The US would do well to look at its business licensing requirements to see if they could be simplified in terms of paperwork.
- lurcio 7y ago
  It's also cheap and trivial to form a UK company with bank account - no matter whether UK citizen/resident or not.
  - StavrosK 7y ago
    Filing for a company was trivial when I did it, but not many banks would give it an account (NatWest/Barclays/etc wouldn't). Has this changed?
    - lol768 7y ago
      There are quite a few non-legacy bank accounts that you can apply for a company account with in a very painless manner. Monzo, Starling and Tide spring to mind. I use Monzo as part of their business banking trial, but I previously have used Tide and (unfortunately) RBS.
    - jdietrich 7y ago
      Most company formation agents offer a free "bank introduction service". I have no idea how the logistics work, but I was able to open an account with Santander in a matter of minutes.
- mikhailfranco 7y ago
  The smaller businesses can file with a flat-rate VAT (not itemized) which often means 5-10% tax benefit. The UK also has universal free healthcare for residents, so no need for private insurance when you leave an employer and set-up on your own.
sfifs 7y ago
Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)
- sheeshkebab 7y ago
  what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?
  - DreamSpinner 7y ago
    I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?
  - KaiserPro 7y ago
    Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.
  - michaelt 7y ago
    For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...
bko 7y ago
Why do you need "a decent wedge of cash" to have a degree? There are plenty of universities that are affordable. For instance, City University of New York (CUNY) offers four year undergrad degrees for $6,730 a year [0]. You can get a room share in an outer borough for maybe 500 - 1.5k a month or Jersey for even less [1]. And this is one of the most expensive cities in the world. If you're smart, avoid unnecessary expenses, you can probably get by on 20k a year in expenses, which comes out to 26 hours a week at $15/hr, ignoring taxes. Taxes at about 15% at that low income means you'll probably want to earn closer to 25k to have 20k net which means 31 hours a week. But realistically you'll probably want to work full time or over time during the months school is not in session and closer to 20 hours a week at other times. Or try to find a job that pays more. Don't know much about health insurance so that's also something you'll have to consider getting maybe through the school or some city program or just go without it. Or just move to a more affordable city and probably cut everything above in half while hopefully only giving up a bit of the wage you'll earn [0] https://www2.cuny.edu/financial-aid/tuition-and-college-costs/tuition-fees/#1452179204200-d27abe14-99f4 https://www2.cuny.edu/financial-aid/tuition-and-college-cost... [1] https://newyork.craigslist.org/d/rooms-shares/search/roo https://newyork.craigslist.org/d/rooms-shares/search/roo
- KaiserPro 7y ago
  So, working a four day week, and studying full time to do a degree. Yes, I can see that allowing lots of time to form a network and come up with business ideas.
  - bko 7y ago
    I was replying to the specific claim that getting a degree requires a lot of money.
    - hef19898 7y ago
      Undergrad programs are what, 3 to 4 years. That means enough money to replace 30 hour per week job for four years. With uncertain healthcare status. That is a lot of money. Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.
ekianjo 7y ago
Suggesting one variable explains such differences is incredibly reductive. Plus, The US is not a single country, there is federalism and you should treat all states differently since setting up a business in NY is supposedly a lot harder than in other states.
- KaiserPro 7y ago
  Indeed, and lots of companies have shells in Delaware. Because its lower taxes & "better" company law.
  - vonmoltke 7y ago
    > Because its lower taxes Lower taxes is irrelevant unless all your operations are in Delaware. It's a great trick for IP holding "companies" that are just a couple lawyers in Wilmington, but otherwise you are paying taxes to whatever states you actually generate revenue in anyway.
luckylion 7y ago
The UK used to (?) be a haven for Ltd creation because of low costs, low bureaucracy and quick reactions. It's what lead to Germany's laws regarding UGs (Unternehmergesellschaft, literally entrepreneur company), much more comparable to the Ltd regarding easier access, much lower startup costs than the typical GmbH. It will be interesting to see where these numbers move post-brexit.

rahimnathwani 7y ago

Registering a company in the UK, and keeping it running, is both simpler and cheaper than in the US. Registering a company takes a few minutes and costs less than $30. Compulsory annual filing costs less than $20. If your company's revenue is below some threshold, you don't need to register for VAT (similar to sales tax). And there's another (even higher) threshold below which you can file very simple annual accounts (unaudited, and including neither income statements nor cash flow).

StavrosK 7y ago
Agreed, I founded a UK company on a whim one day so I can bill for some freelancing work. It made a few thousand a year and everything was hassle-free, basically "pay $50/yr and file some stuff that tells us you're active, and when you get large enough to afford a good accountant they'll take care of it".
dsfyu404ed 7y ago
Based on those differences I'd wager that a lot more people in the UK would register their side gigs whereas in the US the trade-offs are rarely worth it unless you intend to make it a "legitimate business" at some point.
brianwawok 7y ago
Eh, in my state in the US it is like $85 every 2 years for a LLC and essentially no paperwork if a simple pass-thru. Not everyone needs a Delaware C-Corp from day 1.
- Reedx 7y ago
  Nice. That's a lot simpler than CA. Here there's paperwork, more complicated taxes and $800/yr for a single-member LLC.
vonmoltke 7y ago
That's about the process in Texas. Incorporating is a different story, but you don't have to incorporate to register a business (and it's probably a waste of money if you are the sole owner with no employees).
- rahimnathwani 7y ago
  Does the simpler option provide limited liability?

pjc50 7y ago

The UK also makes company formation very easy and still slightly advantageous for sole traders, which may be a factor. I did check the criteria and they do include "must be listed for VAT or PAYE", so they're all real businesses to some extent and not just shells. The US would do well to look at its business licensing requirements to see if they could be simplified in terms of paperwork.

lurcio 7y ago
It's also cheap and trivial to form a UK company with bank account - no matter whether UK citizen/resident or not.
- StavrosK 7y ago
  Filing for a company was trivial when I did it, but not many banks would give it an account (NatWest/Barclays/etc wouldn't). Has this changed?
  - lol768 7y ago
    There are quite a few non-legacy bank accounts that you can apply for a company account with in a very painless manner. Monzo, Starling and Tide spring to mind. I use Monzo as part of their business banking trial, but I previously have used Tide and (unfortunately) RBS.
  - jdietrich 7y ago
    Most company formation agents offer a free "bank introduction service". I have no idea how the logistics work, but I was able to open an account with Santander in a matter of minutes.
mikhailfranco 7y ago
The smaller businesses can file with a flat-rate VAT (not itemized) which often means 5-10% tax benefit. The UK also has universal free healthcare for residents, so no need for private insurance when you leave an employer and set-up on your own.

sfifs 7y ago

Interestingly, only a quarter of the businesses are employers in UK, so most of the company creation is presumably basically city of London financial engineering :-)

sheeshkebab 7y ago
what's with justifying an existence of a company by having employees? If a company is profitable and you as an owner are doing well financially, does it really matter?
- DreamSpinner 7y ago
  I believe the general thought is that at a very simple level, operating as a company provides for a number of protections for the owners/operators. At a societal level, the broad justification for allowing unnatural beings with those benefits is that it still provides a net benefit to society through things like employment opportunities, taxes and the encouragement of economic activity. If the concept of a company no longer provides any non-trivial benefit to society (for example, no jobs or taxes), why should society collectively provide laws that allow them in the first place?
- KaiserPro 7y ago
  Shell companies are not the same as a person working as a "one man band" For example a company I worked for had a structure where the employees and customers (~250 employees and £50million turnover) were mostly interacting with the named company, but there were three other companies that "onion skinned" the company with the name. This was done to manage debt, primarily, which then allowed manipulation of taxes.
- michaelt 7y ago
  For reasons outside my area of expertise, UK companies sometimes divide themselves into numerous sub-companies. This produces the result that publicly traded company Tesco PLC has a great many sub-companies [1]. This is at odds with a lot of expectations about how companies are counted. [1] https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3JdZy4zFMkg0Vw/appointments https://beta.companieshouse.gov.uk/officers/uZl4-qVGUWaBK3Jd...

bko 7y ago

Why do you need "a decent wedge of cash" to have a degree? There are plenty of universities that are affordable. For instance, City University of New York (CUNY) offers four year undergrad degrees for $6,730 a year [0]. You can get a room share in an outer borough for maybe 500 - 1.5k a month or Jersey for even less [1]. And this is one of the most expensive cities in the world. If you're smart, avoid unnecessary expenses, you can probably get by on 20k a year in expenses, which comes out to 26 hours a week at $15/hr, ignoring taxes. Taxes at about 15% at that low income means you'll probably want to earn closer to 25k to have 20k net which means 31 hours a week. But realistically you'll probably want to work full time or over time during the months school is not in session and closer to 20 hours a week at other times. Or try to find a job that pays more. Don't know much about health insurance so that's also something you'll have to consider getting maybe through the school or some city program or just go without it. Or just move to a more affordable city and probably cut everything above in half while hopefully only giving up a bit of the wage you'll earn [0] https://www2.cuny.edu/financial-aid/tuition-and-college-costs/tuition-fees/#1452179204200-d27abe14-99f4 https://www2.cuny.edu/financial-aid/tuition-and-college-cost... [1] https://newyork.craigslist.org/d/rooms-shares/search/roo https://newyork.craigslist.org/d/rooms-shares/search/roo

KaiserPro 7y ago
So, working a four day week, and studying full time to do a degree. Yes, I can see that allowing lots of time to form a network and come up with business ideas.
- bko 7y ago
  I was replying to the specific claim that getting a degree requires a lot of money.
  - hef19898 7y ago
    Undergrad programs are what, 3 to 4 years. That means enough money to replace 30 hour per week job for four years. With uncertain healthcare status. That is a lot of money. Over here studies are basically free, about 100 EUR incl. public transport per semester. And even then working full-time to be able to finance all of that is hard.

ekianjo 7y ago

Suggesting one variable explains such differences is incredibly reductive. Plus, The US is not a single country, there is federalism and you should treat all states differently since setting up a business in NY is supposedly a lot harder than in other states.

KaiserPro 7y ago
Indeed, and lots of companies have shells in Delaware. Because its lower taxes & "better" company law.
- vonmoltke 7y ago
  > Because its lower taxes Lower taxes is irrelevant unless all your operations are in Delaware. It's a great trick for IP holding "companies" that are just a couple lawyers in Wilmington, but otherwise you are paying taxes to whatever states you actually generate revenue in anyway.

luckylion 7y ago

The UK used to (?) be a haven for Ltd creation because of low costs, low bureaucracy and quick reactions. It's what lead to Germany's laws regarding UGs (Unternehmergesellschaft, literally entrepreneur company), much more comparable to the Ltd regarding easier access, much lower startup costs than the typical GmbH. It will be interesting to see where these numbers move post-brexit.