More than 375,000 new businesses started during coronavirus pandemic
While 2020 has been an incredibly challenging year for small businesses, new research from Capital on Tap found that thousands of people up and down the country have started their own business despite uncertain times.
Whether due to necessity or the opportunity afforded by increased amounts of time spent at home, the UK’s lockdown entrepreneurs are helping to drive the economy at a time when other businesses are closing and unemployment is rising.
New businesses by region:
- London – 135,074
- South East – 42,774
- North West – 37,317
- West Midlands – 30,716
- East – 29,498
- Yorkshire and the Humber – 21,838
- East Midlands – 20,542
- South West – 20,030
- Scotland – 16,494
- Wales – 8,977
- North East – 8,444
- Northern Ireland – 3,966
London’s long-standing reputation as a hub for new businesses stood strong throughout 2020 with 17 of the UK’s top 25 entrepreneurial hotspots being in London with start-up powerhouses Camden and Hackney leading the way, in fact, more than a third (36%) of new businesses were born in the nation’s capital.
Outside of London, only Birmingham, Manchester, and Leeds were able to crack the top 10 areas for new business registrations.
Top 10 most common industry/sectors
- Online Retail – 5.4%
- Property Development – 3.6%
- Management Consultancy – 3.5%
- Development & Construction – 3.4%
- Property Letting – 3.0%
- Business Support Services – 2.9%
- Freight & Haulage – 2.2%
- Food Prep & Delivery – 2.1%
- IT Consultancy – 2.0%
- Beauty – 1.7%
As coronavirus restrictions forced more people to shop online, the online retail sector accounted for more than 5% of businesses registered in the UK since lockdown began. It’s likely that many of these businesses were founded by ‘homepreneurs’ who are using the extra time spent at home to turn their skills and hobbies into online businesses using services like Amazon, eBay, and Etsy as shop windows.
The food preparation sector also saw a large number of new registrations accounting for over 2% of all new businesses. Examples of the types of businesses in this category include street food vendors, food stalls, and delivery or take-away only restaurants. This suggests that while eating indoors in traditional settings has been disrupted by coronavirus restrictions, entrepreneurs seized the opportunity to start mobile food stalls and vans, taking their food directly to the people instead.
Third-party food delivery services such as Just Eat, Deliveroo, UberEats, and even social media apps like Instagram have also made it easier for people to start and promote small businesses from their own kitchens, turning their talent and passion for cooking and baking into a source of income.
In June, Uber Eats announced that it had almost doubled the number of restaurants on the app in just four months, resulting in a sales increase of 160% as lockdown fueled demand.
David Luck, CEO of Capital on Tap commented: “The disruption caused by coronavirus pandemic has had a significant impact on people, businesses, and the global economy, so it’s inspiring to see so many entrepreneurs backing themselves and seizing the opportunity to start their own businesses.
“With remote working increasing our reliance on technology, it’s not surprising to see digital and IT businesses dominating the list of the most common new registrations, however, the increase in online retail and food delivery businesses would seem to suggest that large numbers of people are starting new business ventures from home and using online marketplaces and delivery apps to turn their passions into successful small businesses.
“Whether you’re just starting out or you’ve been around for a while, running a business is hard enough without having to worry about funding. That’s why we believe in offering quick, straight-forward funding options so that you can focus on the bigger picture.”