Insurance · 16 November 2017

Finance and property startups least likely to survive first year of trading

Finance and insurance firms faced the most bleak outlook in terms of business survival
New analysis of Companies House data has confirmed the harsh environment entrepreneurs enter into when starting a business, with almost 40, 000 companies failing to pass their first year of trading since 2007.

After assessing data of businesses incorporated in the past decade, company formation agency Turner Little uncovered how many went into liquidation, administration or had a proposal to be struck from the register in the same year of foundation.

Providing an overall picture of the years between 2007 and 2016, a total of 39, 674 companies went into liquidation the legal ending of a business in the same year they were founded, having failed to either grapple financial planning or the strength ofcompetition.

In the same period, 1, 401 firms went into administration in their first year, handing over legal ownership of the company to an insolvency practitioner.

Curiously, the financial crash did not dampen the UK’s entrepreneurial spirit. From 2010, the number of incorporated companies increased year-on-year, with 2012 seeing the most new businesses.

The most risky year to start a business appeared to be 2015, which saw the highest liquidation rate of the timeframe.

Read more:?The difference between insolvency, liquidation, bankruptcy and administration

Turner Little analysed CreditHQ data to find out how different industries fared in terms of first-year survival rates

Industry Rate of survival after first year?
Information and Communication 93.8 per cent
Retail 92.9 per cent
Professional, scientific and technical 92.9 per cent
Motor Trades 92.7 per cent
Education 92.6 per cent
Wholesale 92.6 per cent
Health 92.1 per cent
Transport and Storage 92 per cent
Accommodation and Food Services 91.3 per cent
Arts, entertainment & recreation 90.3 per cent
Production 90.1 per cent
Construction 90 per cent
Business admin & support services 86.4 per cent
Property 85 per cent
Finance and Insurance 83.2 per cent
Commenting on the findings, James Turner, managing director of Turner Little, elaborated on some of the unexpected challenges of entrepreneurship.



Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.