Despite the tough economic climate, new analysis of Companies House data has found that 90 new businesses were created every hour across the UK in the first half of this year.
iwoca, one of Europe’s largest small business lenders, has released its Small Business HotSpots UK 2022 list. It has been compiled using original analysis of Companies House and ONS data, and highlights the areas of the UK which have seen spikes in new business registrations. It reveals:
- more than 402,000 businesses were registered in the UK between January and June 2022, an increase of 18% from 2021
- Scotland came at the bottom of the list with only 338 businesses created per head, with the North East in second to last place with 345
- London saw the highest business creation rate per capita across the regions with 1,587 new businesses per 100,000 people, followed by the West Midlands (571) and North West (554)
- the top ten local authorities are all located in London, with Camden seeing the largest number of businesses registered per 100,000 people out of all UK local authorities
- the rise in new businesses reflects the record number of UK workers choosing to move jobs this year
Despite rising economic concerns, 93 new businesses were created every hour across the UK in the first half of 2022, according to the research by iwoca.
London and West Midlands top list of areas to start a business
iwoca’s Small Business HotSpots UK 2022 reveals that London saw the highest rate of business creation in the first half of this year with 1,587 businesses being created per 100,000 people. This was followed by the West Midlands (571) and North West (554). Scotland appeared bottom of the list with a rate of 338 new businesses per 100,000, with the North East in second last place with 345.
When looking at how this changed between the first half of 2021 and 2022, Yorkshire and Humber saw the highest percentage increase in the rate of new businesses per capita created compared to 2021, with a 41% rise. This was followed by the East Midlands and Wales which both saw a 24% uplift over the same time period.
Camden tops the list of local authorities as London dominates top ten
Camden saw the highest total number of businesses registered per 100,000 out of all UK local authorities, with 10,204 new companies. The second largest number of firms per capita were registered in Hackney (6,396) followed by 5,542 in Westminster. London’s local authorities make up all of the top ten. The analysis reveals that Manchester is the highest local authority outside of London, with 1,165 businesses created per 100,000, followed by Luton at 990.
The analysis also revealed significant proportional growth in the number of businesses outside of the main cities. Compared to the same time period last year, the Isle of Wight saw the highest percentage increase in the rate of new businesses created in any local authority with a 125% increase, followed by Blackpool (98%) and Oldham (87%).
Increase in new small businesses follows record high of job moves
The rise in new businesses sits alongside an increase in the number of workers seen moving jobs this year. Total job to job moves within the UK increased to a record high of 997,000 during the first quarter. ONS data records that a large proportion of these moves were driven by resignations - far more than redundancies - suggesting that some workers may be proactively deciding to quit their jobs and set up new businesses.
Seema Desai, iwoca’s Chief Operating Officer said: "Despite the prevailing headwinds of an impending recession, we are encouraged to see that so many businesses have been created during the first half of this year.
"As many of these businesses struggle with cash flow in the coming months due to skyrocketing business costs, it is vital that lenders step in to provide a helping hand. We are proud to do our part at iwoca, adapting to the needs of small businesses. We do this mainly by deploying the latest embedded technology so that SMEs across the country can access our finance through the services they already use day-to -day."
Cassie Ryan, owner of Birmingham based NOIR Footwear, said: "I have always dreamed of setting up my own footwear brand, and during the pandemic I decided to bite the bullet and actually do it. As a single parent on furlough, I enjoyed the extra time I was able to spend with my daughter, and realised that I wanted the flexibility not only to chase my dreams, but to also achieve a better work life balance.
"It's been an incredible 12 months. I have enjoyed some successes whilst also learning from the challenges and mistakes along the way.
"There is no doubt that this is an exciting journey and I hope to continue to grow over the next few years. iwoca has played a vital part in providing us with the finance required to do just that."
Story submitted by Antara Jaidev, Hanbury Strategy