The degree of risk felt by those thinking of starting their own business is wrongly inflated, deterring some from taking the next step. New research has found that a myth widespread among the public is that most small businesses fail within the first year. In fact, contrary to what many people think over 80 per cent of new businesses survive their first year of trading.

The Myths Surrounding Starting and Running a Business research released today highlights some of the myths that discourage many people from taking the plunge and starting up their own business.

The research reveals:

* MYTH: It takes years to start a business from scratch.

* FACT: Most businesses are established within six months.

* MYTH: The rejection figure for business loan applications is significantly higher than it is.

* FACT: Overall, only 10-20% of applications are rejected.

* MYTH: It is difficult to make an adequate living from a start-up.

* FACT: People's estimate of income in their first year of trading is only half of the figure actually achieved by small businesses.

Launching the campaign to dispel the myths, DTI Minister for Competitiveness Barry Gardiner said: "Prior to entering Parliament I too started and ran a business. Before making the first step I - like others - was faced with potential concerns. Many of these turned out to be misplaced and I am glad I made that leap into business. I want many others to do the same.

"There are now a record 4.3 million small businesses in the UK - this is over 500,000 more than seven years ago. Small businesses and start-ups make a major contribution to the health of the economy, increasing jobs, productivity and prosperity, it is therefore essential that the myths surrounding starting up a new business are dispelled."

Building on the outcomes from the conference, the DTI's Small Business Service will work with partners to find ways to use this research to influence national/regional marketing and communications aimed at encouraging more people to consider starting a business.

The Government is committed to encouraging enterprise and creating a "can do" society. This year's Government funded Enterprise Week saw over 2,000 events take place involving an estimated quarter of a million of young people. The Government is also putting £60 million a year starting this year to provide enterprise education in schools to help encourage more young people to regard entrepreneurship as a worthwhile career choice.