The majority of BME entrepreneurs are involved in catering, followed by retail and professional services.

The number of black and ethnic minority entrepreneurs starting up a business has grown significantly in recent years and they now represent 11 per cent of all new ventures.

Over the last four years BME start-ups have grown by over a third from 32,000 in 2000, to 50,000 in 2004.

They are also three times more likely to have a turnover between £250,000 and £1 million, and to employ staff, according to the results of research commissioned by Barclays Bank.

However, the majority of respondents said that difficulty with finance was the main barrier they had faced when starting up their businesses.

Just over 50 per cent said that they simply didn’t have enough money to start, while a third stated that they had problems accessing finance from banks.

For many, this issue was overcome by borrowing from family with 63.9 per cent of people saying their relatives had made some financial contribution to their venture.

Other barriers cited were time pressures and not having the right resources or contacts, while just over five per cent said that they had encountered racism when starting out.

Attitudes towards business

Overall the research findings are hugely encouraging and indicate the important contribution BMEs are making to the economy. However, there is no room for complacency as BMEs still face some unique barriers. Professor Monder Ram OBE

The survey revealed that a large number of respondents held quite negative views towards the way BME entrepreneurs are perceived and treated, with 61 per cent agreeing that in general they were paid less for doing the same role as their white counterparts.

The same number also felt that they were taken less seriously, while only 37 per cent felt that the present government is committed to helping support and establish ethnic business.

However, more positively, 67 per cent felt that it was now easier for them to set up in business than it had been in the past, and nearly half said they expected their business to grow either moderately or rapidly in the next three to five years.

Commenting on the research, Professor Monder Ram OBE, Director of the Centre for BME Research at De Montfort University in Leicester said:

“Overall the research findings are hugely encouraging and indicate the important contribution BMEs are making to the economy.

“However, there is no room for complacency as BMEs still face some unique barriers.”