356,096 businesses have started up in 2015 using data from 28 July Start Up Britain tracker! The UK is on target to reach 600,000 this year – the fastest ever rate. The net gain of business numbers is rising all the time as more businesses survive for longer.
The South East Midlands has the 5th highest start up rate of all 39 LEPs in England (LEP Dashboard 2015, ERC). So what are the factors in this?
- Family and background – more businesses are formed by families with business interests.
- Mobility – areas with a dynamic and growing population see more start ups than elsewhere. More businesses are formed by migrants to the UK than rates among the local population (ERC, 2015)
- Location – strong transport links, superfast broadband, international airports all make start ups a stronger proposition
- Education – areas with stronger educational profiles with more people with higher level qualifications tend to have higher start up rates
- Attitude – this is the hardest nut to crack but the people who establish a business are typically more aspirational, with greater ambition and a confident attitude to risk – and so much of this is linked to the issues above.
So we are doing well on start up but how big do those businesses grow? Nationally 6% of start up businesses scale up to £1M+ turnover. The South East Midlands is in the middle of the pack among LEPs on this indicator so how do we grow each start up business? There is lots of research on scale up that has been done in the last year – most impressively is Sherry Coutu’s report to Government in 2014
However we also need to understand that in the South East Midlands, 15% are sole traders and 22% are below the threshold for VAT registration and see a business as a way of generating an income as an alternative to traditional employment. We need to ensure that the start up and growth business support provides for both these economically valuable approaches.