The startup world is a fiercely competitive one, with companies across sectors opening and closing at a rapid rate. Safestore have carried out a study of UK regions to compare the rate of businesses opening and closing over the last 6 years. Across the entire country, over 7 businesses are opened per 100,000 people every year with nearly 10 closing on average annually.
Rate of Closure by Region
According to PwC, the UK has seen an average of over 5,600 businesses close yearly since 2013, which is nearly 30% higher than the number of openings every year. When the figures are combined to show a net increase/decrease, all regions recorded a deficit in the number of businesses opened/closed.
- Wales was the region that recorded the lowest deficit in terms of closures, with a net decrease of 0.6 businesses closed yearly per 100,000 people.
- Conversely, Scotland have seen the highest rate of businesses closing with a deficit of 4.8 per 100,000 people
- Over 1000 businesses open up shop each year in London, but see 1,400 close down on average every year, which sees them rank 2nd bottom in our study
- The number of businesses opening every year has been gradually decreasing, with last year showing 40% less businesses opening than the figure recorded in 2013.
Biggest Business Issues
In every sector, business owners are faced with a number of problems to solve every day of the week. We’ve looked at 8 major sectors to find what matters most.
- Legislation – Of all the metrics studied, legislation was the biggest concern on average. 30% of Agricultural companies place it as a key concern, with 1 in 5 owners of Transport, Real Estate and Business SMEs viewing it as a key issue.
- Finance – 16% of manufacturing businesses see cash flow as a large concern, more than any other sector. The same sector also rank highest for worries over ‘access to finance’ with 1 in 10 stating it as a prominent issue.
- The Economy – Only legislation is a more concerning factor for businesses than the current state of the economy, affecting 20% of Transport and Storage businesses.
Goals vs. Mistakes
By taking a look at existing survey data, Safestore have been able to highlight both the primary objectives for a business owner, and the most common reasons for failure. Some of the highlights from the research can be found below.
- Aiming High – Growth is unsurprisingly one of the most important considerations for over half business owners outranking all other key goals
- Tech & Structure – Nearly a third of business owners list their primary objectives to be related to IT or to the development of their companies structure
- Clear Objectives – Less than 1 in 10 business owners place efficiency and innovation at the forefront of their business strategy, prioritising more practical goals such as workforce and finance.
- No Idea – The highest proportion of business owners (35%) see the lack of a business model as the reason for failure
- Money Talks – Over 1 in 5 of surveyed entrepreneurs claim that running out of cash was the reason for their ventures fall down
- Hot Competition – 11% of those surveyed believed that ‘more able competitors’ were to blame for their companies’ demise, which is notable when a lower proportion value innovation as part of their business model.