As the UK recovers from recession, some of the serious challenges facing new and existing businesses are hikes in VAT, fuel duty and inflation. And with the prospect of bank lending looking decidedly downbeat plus talk of a “double dip”, you certainly could be wondering if 2011 will be a good year for start-ups.
It’s a question that’s important to me as our accounting software is designed for the start-up market. Less startups mean less potential customers.
Despite the stormy economic climate, 2010 saw more new businesses launched in the UK than in any of the previous three years. In fact, last year an estimated 570,000 fledgling firms set up new bank accounts, according to The British Banker’s Association.
On reflection, this doesn’t surprise me. I suspect many people found themselves with no job and no prospect of getting one. So, like me when I started in business, they had no other way of earning a living but to go and start that business they’ve been talking about for ages.
Small to medium businesses are considered the life-blood of our economy, accounting for 60% of all private sector jobs. The general mood however is that more needs to be done to help support small business development. So what is the government doing, and what positive factors are encouraging small business growth?
For budding entrepreneurs who have been claiming Jobseekers Allowance for at least six months, the Government’s New Enterprise Allowance scheme could be just the ticket to get a cash-strapped business idea off to a flying start.
Launched last month in Merseyside with a nationwide rollout by autumn, the programme offers up to £2,000 of financial support, including a start-up loan, weekly allowance and guidance from an experienced mentor.
Depending on your location, tax incentives for new firms include the recently announced NIC ‘holiday’. Eligible businesses can claim a reprieve through the scheme from paying NIC for the first 10 employees hired in the first 12 months of trading. This could save up to £50,000.
Of course, in today’s web-savvy world, your home computer and a great idea could be all you need to achieve a full throttle lift-off this year. Advances in technology have made setting up and launching a business from home easier and more affordable than ever before.
KashFlow customer Tracy Hazell got started in business recently and runs sites such as The Best Of Woodbridge that promote other local business. “Setting up your own business in the UK is relatively straightforward, and there is plenty of online and offline help available to guide you through the process.” she said.
“There are many sites, such as Business Forums, that offer help and advice. The popularity of social media has also made it easier to market your business in today’s competitive environment. Whatever the climate, you can succeed with a lot of determination and by offering a great product or service”.
So in summary, 2011 should be a good year for the number of new businesses started. Although possibly not as good as the darker years of the recession.