With the current recession affecting every one of our lives, it could be easy to assume that levels of company formation would fall. This, in fact, has not been the case. The recession seems to have stimulated company registration, which in turn will help to bring the country out of recession.
According to data gathered by the office of national statistics, the number of self-employed individuals has increased by around 56 000 in the last year. This makes the number of self-employed people in the UK around 6.63 million. The number of company formations also increased a huge amount; around 12.2% over the same period. These factors could also have impacted upon the slight fall in the number of unemployed.
All this is excellent news for the economy. New start businesses are an excellent economic stimulus, and can bring economic growth where there once was none. Company formation also means that more and more people are taking on employees, therefore reducing unemployment and increasing the number of people contributing to the economy.
Starting a company in the recession, although risky, can ensure the longevity of a business, provided it doesn’t fall at the first hurdle. These businesses will learn how to deal with worse case scenarios and learn to survive in situations where the more established businesses have faltered.
The level of company formation is likely to rise further, with the concessions made to small businesses in the recent emergency budget. Long may it continue.