Thousands of small business dreams are not being turned into reality because would-be entrepreneurs are failing to put their plans to the test.

A report, The Fear of Flying, by High Street bank Abbey National, investigated the reasons and found an overriding fear of financial failure.

The report was carried out for the bank by NOP and showed one in six people had seriously considered setting up their own business in the last two years.

However, only two per cent of the working population had actually become self-employed or founded a business within the last 12 months.

The report used in-depth interviews with would-be entrepreneurs to discover what stopped them going into business.

Gary Hockey-Morley, Abbey National's director of business banking, said: "We are a nation of budding entrepreneurs yet many won't take the plunge despite having done much of the groundwork."

Typical people behind a potential start-up were 39-year-old, employ-ed males with a strong desire to be their own boss.

They considered going into business as a life-changing moment and were ambitious in terms of potential turnover and staff. More than half had been preparing to be sole traders.

The majority spent several months conducting research. Their sources of information included friends and family, banks and building societies, market and competitor research, public sector and advisory bodies and their own past experience.

Some even studied to acquire new skills that would prepare them for life in the small and medium enterprise sector.

In most cases, the research did not deter the would-be business people. Some were even inspired by their findings. What it did do was clarify the scale of their enterprises, making them aware of costs, labour requirements, competition, red tape, logistical hurdles and premises required.

But actually establishing their business was a step too far.

The main reasons for failing to go it alone were:

Financial fears concerning their family or
mortgage.

Being unable to raise the finances.

Concerns about job security.

One of those who backed out said: "I've got three children so if I fail what's going to happen to them?"

After an idea had been shelved, the unfulfilled entrepreneurs retained the desire to run their own businesses. Most claimed they were waiting for different personal circumstances, improved knowledge of the industry or a change in market conditions. For details of the report and a copy, contact richard.davies@lefevre.co.uk