17% of small businesses were established following a redundancy, demonstrating an opportunity in adversity.

With unemployment rates at 7.7% in the U.K., new research by Hiscox has found that 17% of small businesses were established following a redundancy, demonstrating an opportunity in adversity. It also found the majority of startups are not original ideas, but are based on new approaches to existing businesses.

Key findings from the research:

· Being your own boss and living the dream: Almost half of small business owners cited either being their own boss or living their dream as the reason for taking the risk and starting their own business, with 28% wanting to be their own boss and 20% wanting to live their dream.

· Not new, just better executed: 77% of small business owners and operators surveyed said that their business idea was not new, but an improvement on existing offerings. Almost half reported that offering a higher quality of service or product than their competition was their key differentiator - rather than lower prices. A further 22% differentiate themselves by investing time in meeting face-to-face with clients. However, for startups there was a low investment in R&D (5%) and even less in marketing (2%).

· Million dollar idea: Almost a quarter believed they had a 'million dollar' idea when founding their business. After taking the leap, nearly two-thirds now feel confident or very confident that their business is indeed the 'million dollar' idea.

Alan Thomas, small business insurance expert at Hiscox: "Our research shows that entrepreneurs are starting businesses to take control of their future, whether they have experienced a redundancy or want to pursue their dreams. They don’t always need to reinvent the wheel, but offer a fresh perspective on an existing idea – it’s often about hard graft and differentiating yourself from the competition.

"Starting up can be daunting, but if you work hard, understand your risks and keep your self-belief, you can succeed. When it comes to risks, it is important that small business owners use proper planning to protect their million dollar idea while they grow their businesses."