New research has discovered that despite fears that the recession will dampen new business growth in 2023, one in three UK adults (34%) – or 17.9m Brits – plan to start a new business in 2023. This is a significant 24 percentage point increase on 2022, when one in ten (10%) said they want to start a business in 2022.
The survey, organised by QuickBooks, found that, of these new businesses, 84% will be a side hustle as the owner continues to work for another employer full-time or part time, while just 16% plan to make the jump to go it alone. The reason many are thinking of starting a new business is to give themselves a more lucrative income stream as the cost of living crisis and recession bites (43%), while others simply want to try something new (43%)
In a similar vein, the recession has had the effect of pushing people who were considering starting a business to make the leap, with more than half (56%) saying inflation means they need to boost their income, and 42% saying the recession means they need to protect their income.
Confidence remains high despite challenges of starting up in a recession
When it comes to starting their new businesses, the biggest challenge expected is making a steady income (45%) , while 43% cite attracting customers, 33% say staying motivated and 28% say staying on top of finances. As prices continue to rise, being able to afford the costs of running a business, for example energy bills and materials, was also a challenge flagged by 31% of the aspiring business owners.
Despite the potential challenges, more than two thirds (69%) of people looking to start a new business are confident that their business will succeed. And with good reason – 40% believe they have a business with strong customer demand regardless of economic outlook, almost a third (32%) have invested time into getting pricing right to make it competitive for customers and 30% believe they have found a genuine gap in the market.
Entrepreneurs intend to self-fund new start-ups
This confidence among new business owners is reflected in their willingness to fund their businesses themselves, with 70% planning to use their own money savings and a quarter (24%) plan to use a loan from family and friends. Just 15% plan to use government funding for their business.
More than a third of potential new business owners have said that technology has made it easier to start a business (37%), and this is reflected in the types of businesses they’re starting – 43% will be e-commerce businesses with income from online sales, and 27% will be creator or influencer businesses with most of their income coming from social media.
Jolawn Victor, Vice President and UK Country Manager at Intuit QuickBooks, says: “Despite everything being thrown at us– from the cost-of-living crisis, to rising inflation, to recession – many Brits are still embracing their creativity and ambition and are taking the leap to work for themselves. It is encouraging to see that confidence is high, with our research showing us that 69% believe that their business will succeed despite the challenges up against them; even more than that, they believe they have made the right choice in being their own boss.”
“When the passion is there, the key to running a new business successfully is not letting the financial admin slip. Having well-organised finances can help new business owners make better decisions, by saving them much needed time, that they can re-invest into getting off the ground. Digital financial management tools can help business owners, by automating as much of this as possible, from cashflow planning, to invoicing and chasing late payments. The less time spent doing the financials, the more time new business owners will have to unleash their entrepreneurial spirit and make a real success of their new ventures.”