Having started my own business this year, and my partner also getting his own business off the ground (http://dosh.ltd) I have a particular interest in new enterprises or new business start-ups. Additionally, it is something I have to be up to date on and be knowledgeable of in my practice.
As an employee and in private practice I regularly hear about different initiatives and support available for entrepreneurs, particularly in education as it is part of the statutory guidelines to inform, educate and advise young people on this area (amongst other things). Today I spoke with three different people that offer business coaching and support, which is great to see that businesses are being grown from other businesses. I also spoke with 4 different people representing digital marketing companies (each for their independent business).
Alternatively, through my profession I learn about work that D2N2, LLEP and the East Midlands Chamber offer to support new start-ups and already established businesses. Moreover, there is then the Small Business Association (SMA) and the Federation of Small Businesses (SMF). All of these have their own specifications: some charge fees; some you have to register with and comply with specified points, but are free; and some you have to fulfil a generic agreement to access particular services. It’s all a bit of a mind field really.
However on a larger scale there is a push for new enterprises/start-ups to help in the economic growth of the UK.
Therefore the latest release of information (3/10/18-ons.gov.uk) onl businesses/enterprises that are registered as Value Added Tax (VAT) or Pay As You Earn (PAYE) with HMRC has stayed roughly the same as the previous year (03/17 to 03/18). Nevertheless over the last four years (2014 to 2018) the number has increased by 308,905.
Which is great to see when we are looking at the growth of the economy, and how new enterprises are growing in the UK. Yet controversially companies and public corporations have continued to rise to 71.4% of registered UK companies, having an increase of 7.2% in the last 4 years (2014 64.2%); compared to sole proprietors and partnerships who have decreased to 24.8%, showing a decrease of 7.2% in the last 4 years (2014 32.0%).
Subsequently giving the suggestion that sole proprietors like myself are on the decline. Could this be to it being battered around that half of new businesses fail? According to statistics, that isn’t entirely true; The Small Business Association (SBA) state that 30% of new start-ups fail in the first two years. Then Small Biz Trends (https://smallbiztrends.com) say that 82% of those that fail do so because of cash flow problems. Furthermore that 82% of new start-ups obtain their funding from the entrepreneur directly, or their family and friends. This leaves us with the question of whether entrepreneurs struggle to balance their books, or whether they do not have enough funds available to build the business in the first place, to then make it profitable.
There is little defining line between all of the types of business and statistical information. However, a lot of support is available for small to medium enterprises (0-9 staff and 10-249 staff), but then a lot of legislation is made due to the actions of large enterprises. Furthermore, that a company or public corporation can fall into a small or medium business and a Limited company can fall into all of them. Does this mean that we need a degree to understand more about businesses, and where we can access finance and investments? Or does it mean that we need to seek specialist advice from a business coach or specialists available through different government schemes or private practice?
The fact is we don’t need either. The more I research and network, the more ways I find of accessing information. Sometimes just having a chat with friends that own businesses at the football match can open up new information; as can connecting with other professionals and business people on different social platforms can open up other ways of accessing support and information.
Another interesting point is that London (19%) and the South East of England (15.2%) have the highest number of registered VAT and PAYE companies in the UK (ons.gov.uk). Although they have only changed marginally in the last 2 years: London has increased by 0.3%; and the South East has decreased by 0.1%.
The regions with the biggest changes in the last two years are: Scotland and the South West of England having the biggest decrease of 0.2%; and the North East of England having the biggest increase of 0.4%. Unfortunately there currently isn’t any information available on whether some regions have better initiatives to support new businesses, or whether the backgrounds and social economic factors are significantly different in these regions to explain why this difference in the growth of businesses has occurred. Maybe it could be that we are still educating the new entrepreneurs and enabling them to have the skills and knowledge to make their enterprises more successful? It will be interesting to see what changes are made over the next four years.