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Business is tougher than ever right now. But the coronavirus crisis hasn’t stopped people from wanting to start up.
For most of us, the last few months have been a strange blur of video calls, home haircuts and aimless half-hour walks around the block. For others, the lockdown has provided valuable time to finally work on a business idea.
Startup competition The Pitch conducted independent research to find out how the crisis had impacted people’s interest in starting a business. Out of 2,000 UK adults surveyed, 11% said they wanted to start a business because of the crisis.
History shows people are likely to start businesses during economic downturns. After the 2008 recession, the number of new businesses incorporated in the UK grew by 11% to 365,000 in 2009. This figure then grew for seven successive years.
Almost half of the respondents wanted to start a business to earn extra money and one-fifth wanted something to occupy their time. Other reasons for starting up included:
Some businesses have been created in a direct response to the challenges of lockdown. The Pitch applicant Alice Bird is starting a plastic-free meal delivery service after she realised how much people rely on supermarkets for food. She planned, assembled and distributed the first batch in her local area last week.
Despite the difficulties caused by crises, there are a number of hugely successful companies that started during recessions.
Luke Lang co-founded equity crowdfunding platform Crowdcube in 2009. He believes that tough economic conditions push people to innovate.
“I’m a strong believer that difficult economic times are a breeding ground for innovation; it’s no coincidence that the likes of Funding Circle, Crowdcube and Ratesetter emerged from the banking crisis.
“Britain has a proud history of innovation, enterprise and entrepreneurship and it’s vital we continue to support our startup community, who will be crucial in helping our economy emerge from this crisis,” Luke said.
Ed Reeves co-founded answering service Moneypenny in the early 00s, during a “tumultuous few years of recession”. He admits that there wasn’t a single person who thought it was a good time to start trading, including every investor he spoke to.
The business now has over 1,000 staff and supports thousands of businesses across the UK.
“Out of adversity comes opportunity. I’d happily accept that businesses and individuals might be spending less of their hard-earned cash, but that would mean they’d be open to new ways of working. We’re there again now and any entrepreneurial business that capitalises on that period is my kind of investment,” he said.
In response to the increased interest in starting up and the need for support during the coronavirus crisis, The Pitch is offering every applicant free one-on-one sessions with business experts.
We’re also running five free, day-long business boot camps across the country to find the UK’s most exciting startups. Find out more and apply on The Pitch’s website.
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