According to the Federation of Small Businesses, hundreds of thousands of start-ups are expected this year. Apparently in the UK, we’re losing 120 small to medium sized enterprises (SMEs) everyday but for each one of those, around 11 are starting up. That's approaching half a million new SMEs in 2009. The majority of them are one person bands, risk averse, taking on little or no debt, and not employing anyone else any time soon.
As far as the UK's economic recovery goes, they point to long and slow because they'll do little to reduce the rising unemployment count. Of the 4.7 million firms in the UK only 6,000 are big businesses. The rest are SMEs which employ nearly 60% of the workforce.
SME’s have been more robust in the current recession than many analysts expected. At the height of the recession in 1991, 1,000 SMEs a week were closing. This time around they seem to be carrying less debt and are better placed to make their repayments and keep their costs down.
Redundancy Money
So why are so many would be entrepreneurs choosing now to give it a try? People are looking for something to do with their redundancy money. Savings are attracting such derisory levels of interest that people are more willing to take the risk. Like many new business owners they're able to finance the start-up themselves without borrowing, and they intend to stay small. It’s always that bit cheaper to start up in recession. If you have an idea for how to improve on something already on the market you could find that a lot of your competition has already gone to the wall, leaving you the way clear to pick up the customers as the economy recovers.
If you know anyone who is thinking of starting a business, why not give us a call on 0191 2818191or email sbowen@robson-
