Challenging times but start-ups are on the rise

Despite the cost-of-living crisis and the squeezing pressures of inflation the North West’s entrepreneurial spirit continues to shine.

The number of start-ups in the region is on the rise, according to new figures from the UK’s insolvency and restructuring trade body R3.

Its research has revealed that 40,300 new businesses were created in the region in the first six months of 2023.

That is 13 per cent more than in the previous six months and three per cent more than in the same period last year.

The figures, which are based on data from Creditsafe, show that the North West continues to create more new businesses than any other region except Greater London and East Anglia.

And the North West also accounts for around one in 10 of all new businesses created in the UK.

We echo the comments of R3’s North West chair Fran Henshaw, who points out business creation is “critical” for the region’s economy.

Start-ups play an important role in all sectors of the economy. As well as deepening and strengthening the pool of business talent many of them bring new ideas and technologies to the table and are at the cutting edge of innovation.

The start-up figures are to be welcomed but let’s be under no illusions. Setting out with a new business in today’s economic conditions is extremely challenging.

Knowing your figures and keeping in control of cash flow is vitally important. Be aware of any early alarm bells and act sooner rather than later.

The availability of sound business and financial advice can also mean the difference between success and failure.

It’s vital to seek out the experts that can help new businesses navigate those early years, whether that is by helping develop a clear plan, advising on budgets and forecasting or the adoption of digital support tools.

It’s not just start ups feeling the pressure. Lancashire Business View magazine’s annual Hot 100 list has highlighted the challenges facing the county’s most profitable SMEs.

The uncertainty created by war in Europe, crippling energy bills, soaring inflation, the cost-of-living crisis and major skills shortages have had their effect in the past 12 months.

The Hot 100 figures, published earlier this month, show a 12 per cent drop in profit before tax compared to the previous year and a significant 26 per cent fall in employees.

The removal of Covid government initiatives such as loan schemes and furlough funding has also had an impact on the overall profit number.

However, there is still room for optimism. The profit figure is an impressive £254m and total sales rose by £138m. Total revenues are also at an all-time high as businesses continue to show remarkable resilience.

• To discuss any issues raised by this article including access to start-up support please contact me on 01772 430000