Start-up boom or doom? How this year could spark the UK’s business appetite
For many, the new year is a time to celebrate leaving the stress of our past behind – kickstarting a number of resolutions designed to spark a sense of optimism in the months ahead.
But that sense of hopefulness can only last for so long when the dreaded sense of reality soon finds its way back to us. Alas, it might have already for some, and especially in the world of business.
The nation’s entrepreneurs have, without a doubt, been put to the test over the past few years.
Brexit-imposed regulatory hurdles, pandemic-induced cost pressures, political instability and an overall sluggish economy, the seemingly never-ending list continues.
Naturally, the start-up community found itself hoping for more in 2024. But unfortunately, with the latest post-Budget jitters dominating the headlines, some of that hope was lost.
The sense of certainty Britain was longing for was far, far from achieved.
So, will the year 2025 be one for start-ups to finally thrive? Or will they once again find themselves struggling to survive?
Challenges ahead
A recent Federation of Small Businesses (FSB) survey found an alarming number of businesses have becoming increasingly concerned baout the future of the UK’s workforce under the new Labour government’s employment reforms.
Labour’s employment overhaul was laid out in October with 28 individual measures in the Bill, including ending exploitative zero-hour contracts and banning fire and rehire tactics.
Of the 1,270 small employers surveyed, 67 per cent had said they plan to halt recruitment efforts in fear of these changes, with 32 per cent planning to reduce current headcount as well.
Over half of those employers also said they feel the need to cancel or scale back investment on expansion plans due to the looming cost pressures that could follow.
These worries don’t even begin to paint the bigger picture. Needless to say, the Autumn Budget was not a start-up’s best friend.
There will be a long road ahead for those looking to avoid collapse under the heavy weight of tax hikes, including the implications of a rise in employers’ National Insurance Contributions (NICs), minimum wage allowance, Business Property Relief (BPR) and business rates.
Joanna Jensen, serial entrepreneur and founder of family skincare brand Childs Farm, is one of many who believe the nation must “grease the wheels of business again”.
A start-up’s recipe for survival under these kinds of pressures, she says, will come down to whether the founder is resilient and ambitious enough to succeed.
“If you are following a strategy that’s not working, don’t be afraid to pivot and try something different,” Jensen adds.
“Willingness to adapt sets apart those businesses that succeed and those that fail.”
While only “the most robust and resilient” might survive these post-Budget blues, the UK seems to have at least one thing going for it: an appetite for risk.
An appetite for risk
Small business support platform Enterprise Nation’s annual Start Up Ambition Report revealed there has been a 12 per cent increase in UK adults looking to start their own ventures this year.
One of the main drivers is of course to make some extra cash as a way to keep up with rising costs. Others, however, have decided it’s simply time to start to monetise the hobby they already find themselves involved in.
“What’s behind this is a decade of wage stagnation – people want to increase their income while doing something they love or are good at,” Emma Jones, founder of Enterprise Nation, said.
“But it’s also about the accessibility of technology and good quality business support that helps people to get started and grow.”
Indeed, a number of technological advancements have changed the way start-ups have been able to hit the ground running in recent years. Some might even say it’s easier to start a business today than ever before.
“What we’re witnessing is nothing short of a cultural shift,” Jones added.
“The number of people who want to start a business just keeps on expanding every year, it’s incredible.”