Business start-up queries double

More people are considering setting up in business in Scotland than ever before despite the recession and daunting trading conditions.

And across the UK as a whole, business start-up numbers are performing strongly -this in the face of lacklustre retail figures and continuing problems in obtaining loan finance from banks.

According to latest figures from StartUp Britain, the number of new businesses launched across the UK so far this year stands at more than 335,000.

The figures suggest that despite grim economic picture, many thousands of people are prepared to strike out on their own – with or without help from the banks.

And in Scotland, previously undisclosed figures from Business Gateway, the local authority backed organisation set up to help business start-ups, are dealing with a record number of inquiries from the public.

Data due to be published later this month are expected to show a slight fall in the number of new company registrations from the high levels recorded last year. However, the number of unique visits to its training and advice directory has more than doubled in the first quarter of the financial year.

Says Hugh Lightbody, chief officer for the Business Gateway National Unit, “In the first six months of the year, the training directory has been the most visited area on the Business Gateway website and has overtaken the start-up figures.

In the first quarter of 2012-13 the training area of the web site recorded 205,280 unique visits. This compares with 101,792 for the previous corresponding period last year.

Mr Lightbody added, “We see this as encouraging when you reflect on on-going economic conditions. We’ve had a succession of reports about depressed retail spending, manufacturing struggling, and other pointers which have hit people’s confidence. However, there is a big increase in the numbers seeking advice about business start-up.

“People are taking the opportunity to plan what they are doing and searching for the skills that they need.”

Figures for the year to end March show that 11,027 new companies were formed in Scotland during the year, close to the high levels of start-ups registered in the previous year when the total hit 11, 242 – the highest number since Business Gateway’s inception in 2003.

Given the low levels of  confidence recorded in business confidence surveys, weak high street sales, continuing problems with loan finance and poor summer weather that has hit the tourism and retail sectors, the picture both north and south of the border speaks to a surprising resilience. It suggests there could be a surge in new business start-up if the macro picture showed improvement and provided a fillip to confidence.

So what accounts for the resilience? Business Gateway does not see every start-up: its figures are based on the numbers who have contacted the organisation either in person or through the website.

Says Mr Lightbody, “It is a mixture of need and opportunity – people made redundant and starting out on their own or young people deciding to strike out.

“Anecdotally we believe there is more start-up activity at a time of recession than at other periods.”

Business Gateway is planning to launch a major marketing campaign later this month designed to guide potential entrepreneurs towards its services.

At Start-Up Britain,   national campaign for entrepreneurs launched a year ago in March, a “StartUp Tracker Index” based on Companies House data records the number of businesses being set up each day in the UK.

Says co-founder Emma Jones, “It’s astonishing to think that in the last week alone some 8,600 people decided to start up a business in Britain.

“We’re seeing record numbers of people setting up a business.

“In the times we’re in at the moment, there’s an element of necessary entrepreneurship – people being laid off compelled to launch out on their own.

“But more than that, there is a huge increase in young people who have a talent, hobby or skill that they want to turn into a business.”

The tracker has been created using data from Companies House and interpreted for the tracker by the Made Simple Group.

 Made Simple’s CEO, Howard Graham said: “These stats are very telling about the optimism and momentum within the start-up sector – the StartUp Tracker makes this visible for all to see and plots the highs and lows as well as potentially making it possible for us to discover what makes certain days more attractive for setting up a business.”

The latest figures on the website show 3,884 businesses have been launched over the past two weeks, with the total so far this year now standing at 335,592.

See full interview with Emma Jones.