Since the detrimental effects of the pandemic, there has been a variety of both good and bad news for the UK. There is the more positive outlook, with growth in the UK exceeding that of any other G20 country. On the other hand, there has been worker shortages that have caused chaos at times.
However, there was recently some much needed good news. As reported in City AM, the UK was judged to be the best country in Europe to start a business. E-money platform Tide, who conducted the study, 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 was no places in the top ten for any of Germany, Italy and Spain.
Since the pandemic began, significant numbers of people have started their own business. Most of these have been the younger generations. Not only is the UK the best place to start a business, but it appears that 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%.
During 2020, those 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%.
The CEO of AXA, Claudio Gienal, summarised the findings by saying “the report finds that younger entrepreneurs have brought out new services and products, listened to the needs of local clients and been faster to deploy digital solutions.”
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%. The amount of being employed by these firms is 13.3m and the total turnover was £1.6tn in 2020, which is 36% of the turnover from the private sector.
It appears that an increasing number of younger people view running their own business 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 there are 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 to achieving this.
