By Daniel Hunter
Start-up businesses enjoyed a resurgence in 2011, according to the annual Simply Business Start-up Index, which shows the first rise in annual growth since the start of the recession in 2008.
Last year, new businesses represented 46.9 per cent of Simply Business applications - an annual growth rate of three per cent. This compares with a decline of 3.7 per cent in 2009 and 0.1 per cent in 2010 as the effects of recession continued to bite.
“Our results suggest that Government initiatives such as Start-up Britain have inspired would-be entrepreneurs to make their business dreams a reality,” commented Jason Stockwood, CEO of Simply Business. “It’s now crucial that this support and encouragement continues into 2012 so these fledgling businesses can fulfil their potential.”
The data is based on 350,551 individual insurance quotes requests made to Simply Business, the UK’s largest insurance broker. It reveals key trends in the landscape of UK business start-ups during 2011, including a rise in post-retirement entrepreneurs and increasing levels of regional enterprise.
Retirement nests feed growth in start-ups
The number of people making the most of their retirement to set up a business soared in 2011, with a 19 per cent increase in people aged over 65 taking the plunge and an 11 per cent increase in entrepreneurs between 55 and 64. Over 55s now account for six per cent of all businesses start-ups. However the most entrepreneurial age by far is 25-34, with people in this age bracket generating 35 per cent of Britain’s start-up businesses, up by 2 per cent since 2010.
London loses its edge as regions take up the entrepreneurial mantra
The data shows a picture of entrepreneurial devolution in 2011, as the number of new businesses shot up in the provinces, suggesting that London may be losing its edge as the UK’s start-up incubator.
The only UK region to show strong start-up growth in 2010, Greater London was over-taken in 2011 by the Midlands, South East and South West where the number of start-ups was up by around four per cent, compared to a three per cent rise in the capital. In fact, London’s Westminster borough features in the index’s 10 worst performing towns for 2011 start-ups.
Professional services growing but advertising, property and construction declining
Amongst industry sectors, professional services proved to be a key growth area, with an increasing number of medical, legal and finance practitioners setting up independent businesses. However there was a surprising decline in advertising and creative consultancy start-ups; one of the few industries to show strong growth the previous year. Construction and property businesses also declined sharply in 2011, while there was an increase in the number of general tradesmen.
“With ever increasing life expectancy and more flexibility around retirement, it’s interesting that those in the 60 plus age bracket are considering a second career as an entrepreneur," Stockwood continued.
"Starting a business can be hugely rewarding at any age and those with so much experience behind them are in a fantastic position to make it a success.
“It is also encouraging to see London is no longer monopolising entrepreneurism and other regions are giving the capital a run for its money. This trend will hopefully continue as aspiring business owners see success stories springing up around them.”
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