News & Updates

.
28/01/19
As it currently stands, it is relatively simple to set up a limited business in the UK and most certainly, the majority of this can be done online. Have a look for yourself at a new video created by Companies House shown below.


This seems to be just one of the several reasons why the UK in 2018 saw a record number of start-ups enter the scene, totalling 663,272 new businesses according to the Centre for Entrepreneurs’ analysis of Companies House data. With Greater London leading the way seeing 216,204, other strong performing cities include Birmingham at 18,590, Manchester 9,107 and Leeds 7,376.(1)
Of course, the phrase ‘start-up’ can elicit different responses depending on who’s listening. An elderly relative once referred to the idea of my job application to a start-up as “an awfully uncertain prospect”. Those more enlightened might suggest that a start-up is “a state of mind” and an opportunity to create something new.

Factually a start-up company is simply a new emerging business and whether they are here for the short or long term, the statistics are promising news.

This also happens on the backdrop of the UK being announced for the second year running as the best country for business in 2019 by Forbes.(2) In addition to the unemployment rate for the UK at a near 44-year low of 4%(3) you would be forgiven for thinking it all seems rather peachy for the economy.

Regardless, what is interesting about the emerging structure of our private economy is that 96% of businesses have fewer than 10 employees (and are therefore ‘micro-business’)(4) and 60% of the private sector employment is achieved through SMEs (Small to Medium sized enterprises).(5) With large businesses (those that employ 250+) commanding a seemingly declining minority proportion of employment in the private sector, gone - or going - are the days where a single large company going bankrupt or moving their offices abroad could severely debilitate the economy.

The rise of start-ups, that all fall within the SME category, presents a promising way of tightening any slack that might otherwise show in the economy. Supported by an expanding service-sector dominance, it is easier to switch jobs now than ever - for a majority of us at least.

There are two long-term factors in play for the time being.

Firstly, whether the rate at which start-ups appear will change. I would estimate the rate will either be maintained or increase in the coming year, mainly because there is no foreseeable reason for a decline. Brexit was just as much a certainty (or rather uncertainty) in 2018 as it is now, and so presuming a majority of the start-ups last year intend to survive longer than a year (which seems pretty reasonable?) they clearly back themselves regardless of what comes in March.

Secondly, the survival rate of these new start-ups. This data is difficult to find and of course for the time being we won’t know how many of the 663,272 start-ups will survive in the years to come. However, even if survival rates are low, provided the birth rates stay high we will be seeing business growth. Let’s not forget either that entrepreneurs are, above all else, creators, and from the ashes of one business another can be planted and grown.

(1) https://centreforentrepreneurs.org/cfe-releases/business-formations-recover-to-reach-new-high-in-2018/
(2) https://www.forbes.com/sites/kurtbadenhausen/2018/12/19/best-countries-for-business-2019-behind-the-numbers/#7e520636161c
(3) https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment
(4) https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06152
(5) https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06152

Author: Edward Beaver on January 28 2019

Could your business benefit from raising its profile?