Small business owner
29 Feb 2024 / Uncategorized

Entrepreneurial appetite is strong, but businesses need conditions for growth

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As the ONS reports a rise in the number of incorporations in 2023 our Chief Executive, Ed Rimmer, explores the newfound appetite from entrepreneurs and shares his thoughts on why the ‘side hustle’ culture is here to stay.

We often look to the number of businesses as a barometer for a healthy economy; it tells a story of entrepreneurial confidence in the market, innovation and ambition, and optimism in the economy. Entrepreneurial confidence has taken a few knocks throughout the turbulence of the past few years and start-ups unsurprisingly dropped as a result. Now, new figures from the ONS suggest that the tide is turning, and that 2023 was the year that entrepreneurs saw opportunity once again for their start ups to grow.

The number of UK incorporations between October and December 2023, increased by 30,363 (16.5%) compared to the same period in 2022, taking the total register to 5,267,187 in December. We know that a steady flow of new businesses is vital to help form a robust economy, so these numbers now rising portray a refreshing sense of optimism in the business community. In the face of ongoing economic challenges - from rising overheads, inflation hikes and increasing customer expectations - entrepreneurs' drive to succeed is prevailing.

A rising appetite from entrepreneurs

There are a number of contributing factors for the shift in incorporations, but 57% of our recent survey* said undoubtedly that rise of the ‘side hustle’ culture since the pandemic has had an impact. For many, the last four years have offered up new ways of working, with many more individuals pursuing passion projects alongside their main employment, or taking the leap of faith to self employment. Growth Business recently reported that the fastest growing sectors in 2023 were online retailers, property and street food stalls.

Budding businesses are identifying gaps in the market, they’re optimistic about their potential for growth and success. They need an environment which allows them to stay on track and gives them the headroom they need to flourish, only then can they prevail past external economic pressures that might come their way.

Building resilience with alternative finance

Of course, against this backdrop of newfound optimism, there is another side to the story for businesses; many that have struggled with rising overheads have been forced to throw in the towel. We know that many existing firms are still contending with the payback of recovery loans, increased overheads have put a strain on their operations and many more businesses have headed in the direction of dissolution in 2023. The BBC recently reported that more than 25,000 company insolvencies were registered last year - the highest number since 1993. While a low level of insolvency does form a natural cycle within the business marketplace, these figures are staggeringly high.

In order for this flurry of new businesses to thrive, we need to ensure they have a landscape where they can grow. The alternative finance industry plays a huge role in supporting businesses of all sizes as they navigate the changing tide and avoid folding as hurdles arise.

Alternative solutions will be vital to businesses in need of support. At Time Finance, we pride ourselves on flexible solutions with a people-led approach. Each business has its unique challenges, which is why getting beneath the surface of an issue to truly understand a business, is at the heart of what we do. Time Finance specialises in the provision of Asset Finance, Business Loans, Invoice Finance, Asset Based Lending.

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