Boom in British start-up companies is bright spot for the economy

Economy
By Liam

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The rise of UK start-ups is a bright spot for the economy, says SME expert EMMA JONES

By Emma Jones for Thisismoney.co.uk

published: | Updated:

Emma Jones CBE is the founder and CEO of Enterprise Nation, a small business and business support network.

2022 was another record year for UK business registrations.

Amid the doom and gloom and straightened out times we find ourselves in, British enthusiasm for entrepreneurship continues to grow.

According to data published Friday, 784,762 companies were registered with Companies House in 2022, nearly 30,000 more than in 2021 and 114,000 more per year before the pandemic.

Emma Jones, CEO of Enterprise Nation, says the record number of companies registered last year is a testament to the UK’s entrepreneurial spirit

In 2019, 670,575 companies were registered.

While many will point to so-called zombie companies and the high rate of dissolutions, the relentless upward trend in these numbers has always been an indicator of the UK’s growing entrepreneurial aspirations.

People take their destiny into their own hands; they jump at the chance to build something for themselves and be their own boss.

It’s tech-savvy Generation Zs, it’s the millennial moms and the over-50s who want to use their skills to create value.

A survey commissioned by Enterprise Nation before Christmas showed clear evidence of this trend before these official numbers were released.

It revealed that around a third of UK adults are considering starting a business this year. That’s an incredible statistic.

Yes, there was evidence of necessity in the findings. The crisis of the cost of living and the shrinking purchasing power of people’s salaries are a major driver behind the boom.

People naturally want to supplement their income. But the reality is that we’ve seen these numbers rise and rise for years.

In 2013 the UK reached the milestone of 500,000 registrations and we will undoubtedly reach one million in the coming years.

There are currently 5.6 million businesses in the UK. About 96 percent of these are start-ups, early-stage micro-enterprises and sole proprietors.

And all this despite being constantly bombarded with an unrelentingly bleak economic outlook and the news that many companies are grappling with energy bills, skills and labor shortages and an increasing tax burden.

And yet they come.

Start-ups are really the bright spot in the business world right now. Without enough fresh innovation and talent, we will never be able to build the future we want to see.

Tickets for our annual StartUp Show last month sold out well in advance this year.

We had 2,000 delegates all hungry for inspiration and to learn the basics of starting a business, from raising investment to launching a marketing campaign. There was no zombie among them.

Dave Fishwick

These companies start with sustainable principles at their core. They are energy efficient by nature, they are purposeful and they are technically possible. There is some evidence that companies starting in a recession have built-in resilience.

But they need access to support. Most startups are brilliant at what they do, but they may not be great at running a business.

They should be referred to the resources out there StartUp UK – a free support and e-learning initiative with Monzo or business.connected – free digital support in partnership with Vodafone.

Enterprise Nation is working with key partners this year to boost the amount of free support out there so we can avoid the dissolutions and liquidations that commentators like to refer to.

Here’s to another record year for this enterprising country.

FIVE TIPS TO START A BUSINESS IN 2023

1. Do your research. The first thing to do is to make sure you do your research properly. If it’s a food product, test it with family and friends, then take it to a wider, less biased audience. It’s always worth ruthlessly researching competitors as well. How do they do things and how can you do things better or more efficiently? There are some great free e-learning modules on how to research a business on StartUp UK.

2. Make a business plan. If you haven’t already done so, you need to invest time in preparing a business plan. A good way to look at this is I’M OFF: idea, market, operations, financials, and friends – including advisors and those who can help you along the way. You can create a business action plan on Enterprise Nation’s free Strive app with Mastercard. It walks you through everything from finance to marketing strategy. It helps keep you on track and accountable, and achieving the goals can be very motivating as well.

3. Start selling. Instantly reaching a wider audience without having to invest a huge marketing budget can be done through powerful global marketplaces like Amazon, Etsy and eBay, giving you easy access to customers and packing and shipping your packages through your local post office. You have to factor in the cost, but it’s a quick way to get started without having to invest in your own digital ecommerce software initially. Or look for service-oriented companies, think platforms like Fiverr or People per Hour.

4. Being paid. It sounds ridiculous, but it’s essential to have processes in place to ensure you can get paid on time. If you have cash in the bank, you are less likely to have to take out unnecessary and expensive financing. If you use marketplaces, the money will come automatically, but if not, get used to billing and chasing on a regular basis. Getting paid is vital and prompt payment is vital for small businesses.

5. Upskilling and networking. Once you’ve received assignments or work, start networking to expand your contacts and build skills. We know that companies that take on advice or find a mentor do better than those that don’t. Joining local groups and attending events while you can is a great way to learn and explore the business world. Enterprise Nation organizes friendly local meetings called Local Leaders. Joining is free, but you must buy your own coffee from an independent coffee shop.

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