The startup world is a fiercely competitive one, with companies across sectors opening and closing at a rapid rate. Safestore have carried out a study of UK regions to compare the rate of businesses opening and closing over the last 6 years. Across the entire country, over 7 businesses are opened per 100,000 people every year with nearly 10 closing on average annually.
Rate of Closure by Region
According to PwC, the UK has seen an average of over 5,600 businesses close yearly since 2013, which is nearly 30% higher than the number of openings every year. When the figures are combined to show a net increase/decrease, all regions recorded a deficit in the number of businesses opened/closed.
- Wales was the region that recorded the lowest deficit in terms of closures, with a net decrease of 0.6 businesses closed yearly per 100,000 people.
- Conversely, Scotland have seen the highest rate of businesses closing with a deficit of 4.8 per 100,000 people
- Over 1000 businesses open up shop each year in London, but see 1,400 close down on average every year, which sees them rank 2nd bottom in our study
- According to PwC, the West Midlands saw an average of 374 businesses opened and 481 businesses closed per year.
- The data reveals that the North West had a total of 2197 new business openings and 2953 business closures between 2014 and 2018. It experienced an average of 126 more closures than openings throughout the combined period and It’s poorest year was 2018, where there were a total of 244 more closures than openings.
Goals vs. Mistakes
By taking a look at existing survey data, Safestore have been able to highlight both the primary objectives for a business owner, and the most common reasons for failure. Some of the highlights from the research can be found below.
Objectives
- Aiming High – Growth is unsurprisingly one of the most important considerations for over half business owners outranking all other key goals
- Tech & Structure – Nearly a third of business owners list their primary objectives to be related to IT or to the development of their companies structure
- Clear Objectives – Less than 1 in 10 business owners place efficiency and innovation at the forefront of their business strategy, prioritising more practical goals such as workforce and finance.
Failures
- No Idea – The highest proportion of business owners (35%) see the lack of a business model as the reason for failure
- Money Talks – Over 1 in 5 of surveyed entrepreneurs claim that running out of cash was the reason for their ventures fall down
- Hot Competition – 11% of those surveyed believed that ‘more able competitors’ were to blame for their companies’ demise, which is notable when a lower proportion value innovation as part of their business model.
You can view the full infographic by Safestore here, which looks at each sector and region in more depth.