As a result of lockdown, many people had a great deal of free time and this is something a lot of us are not familiar with. There are only a certain amount of Zoom quizzes, new recipes and cleaning you can do to occupy your time and mind which has meant that many entrepreneurs with an appetite for innovation have had the time to utilise their creativity and give them the opportunity to start up a new business.
Companies House reported that between April and June 2020, there were 176,115 new incorporations in the UK. The number of incorporations in the second quarter of 2020 increased by 6,139 (3.6%) compared with the same quarter of the previous year. The report outlines that this is the largest quarter 2 year on year increase since 2012.
Of course, the information collated by Companies House is only in relation to incorporations and does not consider new businesses such as sole traders and general partnerships which is likely to also be a substantial increase. The new wave of small and medium enterprises (SMEs) being launched in the recent months is being hailed as a boost to the UK economy.
New client demands mean we have seen an increase is different types of business start-ups. The current pandemic has seen SMEs filling gaps left by bigger businesses. For example, gyms turned their equipment off and shut their doors resulting in personal trainers providing virtual coaching and restaurants were forced to close meaning an increase in independent food and delivery services from their home to yours.
To launch a new business during a global financial crisis is not new behaviour. Both Uber and Airbnb set up business during the recession of 2007-2009. These are long standing, successful companies that have learnt to adapt their models to customer demands. For example, Uber’s branch out of UberEats has allowed their services to continue throughout the pandemic. This highlights that if you are an entrepreneur and you’re not sure whether your business idea is quite ready to take the leap, consider whether it meets new client demands with some slight modifications or a pivot.
A critical factor in deciding whether to take the plunge with your start up idea may depend on your ability to obtain funding. There is the current challenge of a lack of funding being available, whether from investors or not being eligible for government grants. There are financial options out there and the different avenues should be reviewed to see eligibility.
You may decide that now is not the right time to start-up and don’t feel bad about pressing the pause button. These uncertain times will pass and you will have another opportunity to launch in the future. This is a moment to reflect and may allow you the extra time you needed to research, plan and develop you business idea.
It is clear from the reports currently being produced that there is a rise in SMEs and we may find those start ups from the class of 2020 become household names, only time will tell.
