UK start-up survival rates highest in three years

UK enterprise appears to be thriving with start-up survival rates now at the highest rate in three years, according to the bi-annual Barclays and Business Growth Fund (BGF) Entrepreneurs Index.

The survey, which has been tracking entrepreneurial activity in the UK since 2012, foundthat the number of active companies in the UK has risen from 3,139,630 in December 2014 to 3,260,879 in June 2015 – the biggest increase since the index began.

During the same period the number of company dissolutions fell from 193,699 to 170,359 – the first time this has happened since 2012 – while investments were also up, with the number of deals resulting in wealth creation of at least £200,000 rising by 5% to 1,541.

The service sector appeared to be the main growth driver, responsible for 21% of investment deals in the year to June 2015, followed by financial services (8.3%), computer software (7.2%) and industrial products and services (7.2%).

While the picture was broadly positive, the number of high growth companies in the UK has actually decreased. The number of businesses with revenues of between £2.5m and £100m has fallen from 21.5% for the 12 months to December 2013 to 20.8% in the year to December 2014.

Dena Brumpton, head of wealth management at Barclays UK, said:

“The dip in the number of companies that are dissolving is testament to the growth in business confidence we have seen in recent years, allowing UK businesses not just to start up, but to succeed

“Since 2012, the appetite for creating new businesses has grown exponentially, due to a number of factors – from an improving economy to the rise of entrepreneurs over the age of 50 – the UK’s start-up scene is thriving.”

BGF chief executive, Stephen Welton, added: “The fact that the first half of 2015 has seen the UK’s biggest rise in the number of active companies since the Entrepreneurs Index began in June 2012, and also the first decrease in the number of these businesses failing is extremely positive.

“We need to continue to invest in ambitious British businesses in order to contribute to the health and robustness of the UK economy.”