Business births in the UK are at the highest they’ve been in years. As would be expected, business death rates are also rising alongside rising business birth rates. However, the birth rate still well exceeds death rate.
The survival rate of businesses must also be considered. From businesses that started in 2011, 41% were still active in 2016.
A business that runs out of capitol will ultimately fail. When assessing business viability, many factors such as location, industry, management, start up and continuation costs are determining factors.
One of the most important factors in business survival is the business’ respective industry. It is interesting to note that while industries such as transportation and storage, business support and administration services and education currently have the highest rate of business births.None of these industries are ranked to have the highest survival rates.
Do note that the popularity of a certain category of new business industry does not guarantee a higher survival rate.
Likewise, the longevity potential of a new business cannot be dismissed because it holds a high business death rate.
Business support and administration services have one of the highest birth rates. But they also have one of the highest death rates. Also included in highest death rates are finance and insurance, and property services.
The highest level of surviving businesses come from the healthcare, information and communication industries.
Location: for success and failure
Certain locales have the ability to impact business longevity and growth. London, for instance, has both the highest business birth rate at 17.5%, as well as the highest business death rate at 14%.
While these statistics still indicate higher growth than death, London also claims the lowest survival rate at 41%.
The East and West Midlands regions boast the next highest new business birth rates at 15.8% and 15.5%, respectively.
After London, Scotland and the Northwest regions have the greatest business death rates at 11.8% and 11.7%.
Regions with the top business survival rates included the South West, Northern Ireland, and the South East.
It’s prudent to be wise and plan well when setting up a business in an area with less that optimal outlook.
Maximizing factors for success and survival
A well planned and managed business is more likely to survive and thrive. Hence the need to employ both traditional and more innovative strategies when beginning a new business.
Funding and financial planning are key to any startup operation
Plan thoroughly and with several years advance in mind. Never borrow a significant amount above necessity, as interest fees will be present. Plan to spend scrupulously, especially in the critical first few years after business birth.
To maximise productivity while minimizing overhead expenditures, innovative new strategies have gained popularity.
Utilizing flexible workspaces
One such strategy is the growing use of flexible work spaces:
Flexible workspaces are shown to increase employee comfort and productivity. They also give more convenience in relocating or repurposing the space. For meetings, these spaces can be rented for only the time necessary. This spares the business the expense of paying for a more conventional venue.
While about ⅔ of flexible workspaces in the UK are now outside of London, the worldwide leader of flexible workspaces is still London. This is then followed by New York.
Throughout the UK, flexible workspaces comprise 5% of the total office stock; in London this comprises 10.6% of the market.
Business building is reaching new highs, as are the options and considerations available to owners of new businesses. Many external factors can greatly impact a business’s chance of success, much as internal factors may. Considering this, it is an optimal time for new businesses. But do take care to research, plan, and use new solutions to ensure a long surviving business. Check out our infographic below for more information.