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Is UK the best place to start a business?

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Since the detrimental effects of the pandemic, the UK has had both good and bad news. There is a more positive outlook, with growth in the UK exceeding that of any other G20 country. On the other hand, worker shortages have caused chaos at times.

However, there was recently some much-needed good news. As reported in City AM, the UK was considered the best country in Europe to start a business. The e-money platform Tide conducted the study and discovered that the UK has the lowest costs for starting a business.

Factors analysed during the study include the jobless rate, the ease of doing business, and the number of days required to set up a business. In second place was Ireland, with Holland and Denmark third and fourth respectively. There were no places in the top ten for Germany, Italy and Spain.

Since the pandemic began, many people have started their businesses. Most of these have been the younger generations. Not only is the UK the best place to start a business, but the performance over the last 18 months has been stronger in small to medium enterprises.

In 2020, companies run by decision-makers aged between 55 and 64 saw turnover reduce by 29%. Companies run by 45- —to 54-year-olds didn’t fare much better. SMEs run by people between 25 and 34 saw turnover fall by just 12%. But for companies run by 18- —to 24-year-olds, the drop in turnover was just 7%.

In 2020, companies run by 55-64-year-olds experienced a 29% drop in turnover, and those run by 45-54-year-olds saw a similar fall. In comparison, business owners aged 25-35 managed to only endure a 12% reduction in turnover, but the highest-performing age group was 18-24-year-olds. Their revenue decline was only 7%.

AXA CEO Claudio Gienal summarised the findings by saying, “The report finds that younger entrepreneurs have introduced new services and products, listened to the needs of local clients, and deployed digital solutions faster.”

Statistics released by the Federation of Small Business (FSB) showed that at the beginning of 2020, there were 5.94m small businesses with up to 49 employees in the UK. As a percentage of total businesses, this accounted for 99.3%. These firms employed 13.3 m people, and their total turnover was £1.6tn in 2020, which is 36% of the turnover from the private sector.

Many younger people view running their own businesses as the best way to achieve the correct work/life balance. Therefore, the fact that starting a business is made easier in the UK suggests good times ahead for this area of the economy.

Of all the G20 countries in Q2 of 2021, the UK economy grew at the fastest rate, at 4.8%. Consolidating this strong growth will be vitally important, and allowing small businesses to open and thrive will go a long way toward achieving this.

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