We are getting nearer to the halfway point of the year – that means that this is the perfect time to assess the state of start-ups in 2016. Here are highlights of just a few of the most important news stories affecting small and medium sized enterprises (SMEs) in the UK over the past four months in our midway 2016 start-up review.
Changes to PSC Regulation
In a move to increase UK corporate transparency, as of 30 June 2016 the Government will begin requiring all businesses (no matter how small) to create a register of “people with significant control” (PSC).
This will mean that all business owners need to compile information about the people who hold more than 25% of the shares or voting rights in a company. This register will need to include a vast array of information about the people who own and/or control companies, including name, birthdate, nationality and extensive details about their interest in the company.
All UK companies (other than listed companies), as well as all LLPs (Limited Liability Partnerships) will be responsible for submitting this information annually, along with their annual statement to Companies House. All of this information will then be available and open to inspection by members of the publics. Do take note that it will be a criminal offense for a business to not comply.
A recent BCC Report finds that “Growth is Softening”
A new BCC (British Chambers of Commerce) report shows that UK economic growth seems to have continued to soften over the first quarter of 2016, and most of the key indicators used to analyse this information are either static or on the decline.
This survey is based on data submitted by over 8,500 firms in the first quarter of 2016, and shows that the services sector (the main driver of growth) fell this quarter, as did manufacturing. Domestic sales and orders have fallen to their lowest level in three years.
While many of the drivers are static, experts worry that this is part of an overall trend of decline, and that economic growth will continue to soften across the UK in 2016.
BCC chief economist David Kern is disappointed. “These results are disappointing but not surprising. This is the inevitable consequence of mounting global and domestic uncertainties, but it is nevertheless concerning that the vibrant and dominant services sector is likely to face mounting challenges in the next few years. The mediocre employment balances are a warning that we cannot afford to be complacent about the continued dynamism of our labour market.”
What will this mean for start-ups? Well, common wisdom seems to dictate that this will be bad news for small businesses, but on the contrary – start-ups can actually benefit from a declining economy, as they offer innovative solutions and bespoke problem solving.
The number of self-employed people in UK reaches new heights
A recent study has shown that self-employment and freelancing has reached new heights in the UK this year. More and more people are calling themselves “boss.”
The Not Alone report has tracked the numbers of self-employed people in the UK, and attempts to find ways in which co-ops and shared working spaces can better help freelancers achieve their goals. This report, published in conjunction with Co-operatives UK, shows that a full 15% of the UK workforce is now self-employed, totaling a massive 4.6 million people. They point out that this is the highest number in this country since this has been measured.
Many individuals who start out as freelancers or self-employed go on to become a start-up and SME owner, as they need to expand to meet demands.
The New Enterprise Allowance Has Helped Launch 80K SMEs
According to recent Department for Work and Pensions (DWP) data, more than 80,000 new businesses have been founded as a direct result of the New Enterprise Allowance since April of 2011. That averages out to approximately 1,400 a month, a result that has exceeded the project’s goals.
The New Enterprise Allowance empowers people to try something new and start their own companies. These small start-ups are often related to electrical installation, jewelry making and graphic design, and have given former jobseekers the tools and funds to create their own success stories.
According to the DWP report, the top five areas for these start-ups to occur are Liverpool, Sheffield, County Durham, Birmingham and Glasgow, and 20% were started by a person with a disability. This program has brought hope and self sufficiency to over 80, 000 people, and is set to continue indefinitely.
A new report shows that mobile shopping is on the way up
If you are a SME owner, now is the time to be thinking about your website’s usability on smartphones and tablets. A recent report has shown that shopping for goods and services on one’s mobile has continued to increase in popularity across the UK.
According to studies produced by the Centre for Retail Research for RetailMeNot, online spending is predicted to exceed 60 billion pounds in the UK alone this year, accounting for 36% of all UK retail sales. You cannot afford to miss out on this lucrative opportunity – is your site properly optimised for mobile online shopping?
The study found that the average Brit will spend more than £60 per transaction and will spend around £1,300 this year, and that we are much more likely than our European counterparts to purchase our items while using our mobile phone (rather than a laptop or desktop computer).
If you are unsure about your site’s user friendliness when someone is browsing on a smartphone, type your webpage address into Safari (or whatever browser you use) on your phone. Does it look well proportioned? Does it re-size automatically to fit the page? Can you easily navigate between pages, and make a purchase? Try this online test to make sure.
If you answered no to any of these, you are probably losing sales. Contact your web developer as soon as possible for a solution.
That is a halfway start-up review of 2016 for new businesses. Although the economic climate is starting to stagnate, there are increasingly more opportunities for start-ups to take the steering wheel and drive the UK economy forward.