UK remains a top destination for start-ups but finance needs to flow
The UK is among the top 5 destinations for those looking to start a business, according to new research from EuroNews. According to Statista, in 2023, the European Union had about 24.4 million small and medium-sized enterprises (SMEs), employing nearly 85 million people. These made up about 99.8% of all up and running businesses in the continent and were the backbone of smaller regions and towns.
How easy it is to conduct business in any country means taking a few key factors into consideration. The World Bank’s Ease of Doing Business index has classified these into 10 parameters. These include:
- Starting a business
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency
Taking these measures into account, the UK is now in the top 5 places to start a business. Citing ‘One of the most diverse economies and workforces in Europe’ Euronews says the UK also has ‘Measures to support businesses in their first few years, when profitability is low. It also provides tax relief at the end of a business’ life, with regards to the revenue gained from selling assets.’
According to the British Business Bank, about 360,000 new businesses are set up in the UK every year. Forming a company is also relatively quick, easy and cheap, with postal applications being processed within eight to 10 days and online applications, within 24 hours.
In addition, the research shows that the UK has a strong taxation and legal system, with efficient processes and a corporate tax rate of 25% for all limited companies. With a third of adults now having some kind of higher degree, the workforce is highly skilled and adaptable.
One of the most important parts of growing a business of course, is accessing the right kind of funds at the right time. new research has shown that despite the string financial sector in the Uk, a majority of startups still rely on their own funds to scale up. The Ambitious UK Start-Ups Report from Starling Bank, which draws from data gathered from 1,219 applicants for the 2023 UK Start-up Awards revealed that 85% of new businesses relied on the founder’s personal capital as the initial source of funding, allowing entrepreneurs to maintain full control and ownership of their company and avoid debt.
Given the heavy reliance on founders’ funds, 66% of start-ups will be seeking investment into their businesses during the next 12 months although only 13% are using traditional business or bank loans. This suggests that such funding may be limited in availability from UK banks or may simply be less appealing to founders seeking flexible or alternative financing options.
At Paul Beare Ltd we’re helping scores of new businesses set up and grow. So, if you’re starting up a business and need the help of a qualified accountant then at Paul Beare, we can cover off all you need. You can contact us for help from tax and payroll to accounting and banking.