Yesterday we looked at some of the facts, figures and reasons that are prompting individuals to look at self-employment. Today we’ll look at the success or failure of small business since 2006 and how the percentages change between industries and geographical locations.
It may not surprise many of you that due to a poor job market, stagnant wages and the threat of redundancy that starting your own business is seen by an increasing number of former employees as a viable and perhaps more realistic option when looking for work. But starting a business is only the beginning of the story, the real question is how long do these small companies trade for? Not surprisingly, the survival rate of companies created since 2006 has fallen. Of all the business formed in 2006 in Scotland:
Ă˘â‚¬Ë 96% firms survived at least a year.
Ă˘â‚¬Ë That figure is down to 86% – a similar fall to that across the UK.
Ă˘â‚¬Ë Five-year survival for those starting in 2006 was 46% in Scotland but even lower across the UK.
There’s also further variety within the figures:
Ă˘â‚¬Ë The number of Hotel and catering firms surviving longer than five years is 36%.
Ă˘â‚¬Ë Health related business fare much better with survival rates after 5 years standing at 60%.
Self-Employment is increasingly seen as the most realistic option such is the sorry state of the job market and the wages being offered. Unfortunately for the government this solution is seen by many as an option that works for them, but unlike businesses started in different circumstances the initial goal is simply to earn some money and survive.
In the late 90’s when the dot-com boom was all the rage many would be entrepreneurs may have dreamt of their own website, large marketing budgets and being the next success story with a small army of staff to make your millions. The reality of 2013 is that many would simply be happy with a job or a wage, a lot has changed in the last 15 years or so!
The challenge really does lay ahead for George Osborne and the coalition government not only today but also looking into the not too distant future, a popular but rather tricky pastime.
Good luck George, I don’t envy your position!