New Simply Business research suggests more than 600,000 small businesses could fail in 2020. Broken down, that figure is equal to more than 1,700 businesses a day.
Here's why Simply Business is stepping in.
We analysed official government data over the five-year period 2014 to 2018 to get the average annual rate of business closures, which stands at a worrying 10.8 per cent. This means 632,889 businesses with between 0 and 249 employees could collapse this year.
To put it into context, in the year 2018-2019 Companies House records show 508,865 companies were dissolved. This is the highest closure rate since 2009-2010, which may have been down to the recession at that time.
When you consider that small businesses make up 99 per cent of the overall number of businesses in the UK, it’s clear that this is a very serious risk.
It’s estimated that there were 5.82 million SMEs in the UK in 2019, turning over £2.2 trillion between them. If they were to collapse, the effect on the UK economy would be catastrophic.
Further evidence of a bleak outlook for UK small business comes from recent figures released by the Federation of Small Businesses (FSB). Their data shows small business confidence at an eight-year low, with profitability and export expectations tumbling to a five-year low.
Around 80 per cent of UK companies fail within their first year and, according to the latest figures from the Office for National Statistics, only 42.4 per cent of businesses started in 2013 were still trading five years later.
Recognising that small businesses are the heartbeat of the UK economy, providing vital services and jobs in communities up and down the country, we couldn’t sit back and do nothing.
Common barriers to starting a business are fear, a lack of knowledge and a lack of funding. With these in mind, we want to support startups to get off the ground and existing small businesses to flourish.
We’ll be releasing a series of free guides to help small business owners tackle the challenges of starting out or scaling up. We’ll also be giving one entrepreneur or business a £10,000 grant to spend on kick-starting or developing a business.
To apply for the £10,000 cash grant, visit www.simplybusiness.co.uk/take-the-leap. Applications close on 31 July 2020 and are limited to one per business/person.
The competition is open to businesses that are already trading and looking to grow, and people looking to get a new business off the ground.
You’ll have up to 300 words to tell us about your business (or business idea) plus details on what you’ll do with the money. If you’re shortlisted we’ll ask you to submit a video of less than three minutes, with more detail on what you plan to spend the money on and the difference it’ll make to you.
Make sure you read the terms and conditions.
17 March 2020 • 5-minute read
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