How many businesses do we REALLY have in Britain?
According to Start-Up Britain, 2012 was another record-breaking year for British start-ups, with the number of new businesses registered at Companies House up by 10% (484,224 in 2012 compared to 440,600 in 2011).
Emma Jones, co-founder of StartUp Britain said: “These figures are hot off the press, they are unaudited at the moment, but what it’s telling us is that there was a clear increase in start-up rates in 2012. Small and start-up business are the driving force of the British economy and at StartUp Britain we have seen plenty to celebrate over 2012. Times are hard yes, but it never ceases to amaze us when we see resourceful Britons making business ideas come to life in difficult times. We have seen this at Colleges and Universities as part of our national 2012 Tour, at industry weeks, and on the High Street as we’ve filled empty shops with budding StartUps as part of PopUp Britain.”
Having spent the first 11 months of 2012 at Shell LiveWIRE, ‘the UK’s biggest online community for young entrepreneurs’ (and the previous 3yrs before that), I’ve seen first-hand that there’s an abundance of great business ideas, passion, talent and enthusiasm to become self-employed right across the UK (see a snapshot on the Google Map of Shell LiveWIRE Award Winners).
Many people are already deciding to take matters (and their destiny) into their own hands by giving it a go and starting their own mini-enterprise instead of taking a job with someone else, or as a second income on top of their day job (the so-called ’5 to 9ers’). The recession and shortage of jobs in certain parts of the UK is also almost certainly exacerbating this as some people simply don’t have a choice or are covering their backs and hedging their bets for fear of losing their job.
UK has more businesses than you think
Personally, I think that the number of new businesses created in 2012 is far higher than the 484,224 reported by Start-Up Britain as this figure only includes Limited companies (you don’t need to register with Companies House if you are a Sole Trader). This is a common problem with news reports on the state of British business but it’s understandable as the reality is too messy and chaotic for some journalists and politicians to get a true grasp of.
A more accurate figure would be to include the number of people who registered as self-employed with HMRC in 2012 (although there are many who fall under the radar by making a little bit of extra money in an ad hoc way by selling things on sites like eBay, at farmers markets and art/craft fairs both offline and online at sites like Etsy and NEVER get around the registering). These people will often still have a day job and are simply ‘testing the water’ in their spare time. They may genuinely want to go full-time self-employed but haven’t yet built up enough income or confidence to take the plunge. Some may do it for a little while and then give up whilst others may be quite happy with just a little bit of extra cash and not wish to develop the business further.
If we go back to my experience at Shell LiveWIRE, we had between 1500-2000 new members registering on the site each month. However, registration was only required if they wanted to apply for one of the monthly £1,000 Shell LiveWIRE Grand Ideas Awards or comment on the discussion forum so I would consider these people (24,000 max) to be the ones who were ’really serious’ about starting a business or at least taking steps to start.
On top of this you have the ‘lurkers’ and general website visitors who are just reading information on the website and forum about starting a business without actively participating or making themselves known (roughly 250,000 per annum). These people may or may not actually start. On top of this you have all the other people who attended business start-up events across the UK, bought or read books on running a business (Amazon shows that 5,527 books on self-employment were published in 2012 alone) or who spoke to a professional business advisor in 2012 (the National Enterprise Network estimates that they helped create 17,500 businesses in 12 months).
This informal economy may be frowned upon by HMRC but it is happening and so needs proper recognition, not in a negative way but for the potential positive outcome it may have for the people who are doing it if they are to succeed. The secrecy is stifling people’s potential and I’d personally love to see more open discussions about how enterprise professionals, organisations, local authorities and the Government can genuinely help these aspiring entrepreneurs move out of the shadows and into the light of a brighter future for themselves and Britain!
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