New data released by the Office of National Statistics (ONS) shows that over 350, 000 new businesses were registered in the UK in 2014 the highest number since the government began recording business birth rates. Five thousand more new enterprises were created last year than in 2013.
John Allan, national chairman of the Federation of Small Businesses, is of the belief that the figures reflect the contribution of entrepreneurs to Britain’s economic recovery over the last five years, and argued that more people than ever ‘see self-employment and starting out in business as a rewarding career choice.
Suren Thiru, an economist at the British Chambers of Commerce, told the Financial Times the statistics were a true testament to the entrepreneurial spirit that exists in the UK.
The rate of business deaths relative to the total number of UK enterprises decreased slightly to 9.6 per cent, and the total number of businesses trading grew by over 100, 000. But Thiru warned that a rise in the total number of business failures was a warning sign? that more needs to be done to help support young firms, and added: This must include fixing the long-term structural failure of business finance in the UK, through a scaled up and a fully functioning Business Bank.
SME finance providers welcomed the news. Lisa Mayers, sales manager at Ashley Finance, said the figures indicate that the UK has entered an age of entrepreneurialism? and pointed to growth in the alternative finance market which has helped more small businesses secure funding.
London continues to be the most fertile region for business births, with over fifty thousand new companies started in the capital but it also had the highest rate of company failures as almost 11 per cent of enterprises in the city ceased trading in 2014. The South West had the lowest rate of annual demise among new entities – and startups there founded in 2009 had a 45 per cent chance of surviving for five years.
Separate research carried out by accountants UHY Hacker Young recently showed that the rate of new enterprise creation in the UK over the last five years was the highest in the G7 and of the 22 countries they surveyed, only China established new enterprises more quickly.
UHY Hacker Young partner Colin Jones pointed to 2010 cuts in corporation tax for small businesses in response to the findings, commenting: The UK is now a leading nation for start-ups and providing them with the right environment to grow.