An all-time record high number of new UK businesses were created during Lockdown at 302,000, with aspiring entrepreneurs using the pandemic as a springboard to start a new venture.
And the trend is set to continue with evidence that the first quarter of this year saw more business formed that at any time previously.
One year on from Lockdown, 35,633 new UK businesses were registered in March 2021, the highest monthly figure since HMRC began keeping records in the late 1980s.
Despite a slight dip in new business creation at the beginning of Lockdown, these numbers have quickly recovered since, says Growthdeck, the private equity investment firm, which reports that, although the pandemic has caused temporary and even permanent closures of businesses, individuals have not been deterred.
Instead, they have taken this opportunity to make use of advances in technology and the rising popularity of social media to scale up and market their idea, which is now easier to do than ever.
this presents an opportunity for the Government to turn its focus to supporting start-ups and growth businesses
Gary Robins, Head of Business Development, said: “British entrepreneurs have quickly bounced back from the shaky start at the beginning of lockdown and far exceeded previous levels of new business creation.”
“Despite the devastating shock of Covid to the economy, people are holding out for a fast recovery as Covid restrictions are lifted.”
Their research earlier this year found that e-commerce start-ups in particular boomed due to the Covid-19 pandemic.
An average of 4,613 online retail businesses were set up per month during the peak coronavirus months of April, May and June 2020, up 66 per cent from 2,783 on average per month in the previous year**.
Growthdeck says that the sudden surge in new business creation is a reminder that the Government should do everything it can to ensure these businesses have access to the investment they need to scale up. It is vital that schemes such as the Enterprise Investment Scheme (EIS), the Government’s flagship tax-advantaged investment scheme for growth businesses, is protected from any tax increases.
Keeping the scheme in place and even increasing tax incentives will be key in ensuring these businesses continue to get the investment they need
Robins added: “As the economy reopens and businesses begin to get back up on their feet again, this presents an opportunity for the Government to turn its focus to supporting start-ups and growth businesses.”
“The Enterprise Investment Scheme is a crucial initiative that gets vital equity investment to SMEs and accelerates business growth. Keeping the scheme in place and even increasing tax incentives will be key in ensuring these businesses continue to get the investment they need.”
Separate research has revealed that more British businesses have been set up at the start of this year than any first quarter in history. The study by cloud accounting company Ember found that from January to March this year, 211,368 companies were incorporated at Companies House.
That equates to 2,349 brand new businesses each day, or 98 every single hour and marks the first time that the opening quarter of a year has seen more than 200,000 companies created in the UK.
Ember co-founder Daniel Hogan said: “It’s great to see so much new business activity in the UK. The pandemic has changed the way a lot of people think about their lives and their work, and it looks like more people than ever are taking the opportunity to go into business.”