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Britain Is The Sixth Best Country In The World to Start a Business: So Where Do The Opportunities Fall?

The news that the UK is the top country in the G7 for starting a new business (one ahead of the US and one off the Prime Minister’s target of a top five place) shows how changed the British workplace has become.

Not that long ago commercial life was dominated by large industrial employers, public sector organisations and the commercial financial sector, e.g. Norwich Union. Going out on your own was seen as risky and a last resort in many people’s thoughts. So why the change?

Firstly the Coalition Government and its successor created a better fiscal environment for individuals to go it alone. There are still many large employers, but they shed jobs during the recession releasing qualified and able people. By giving tax breaks, national insurance holidays and other red tape cuts, the government – despite its inevitable criticism – created a climate for people to innovate and take a well judged risk. Banks were “encouraged” to lend to small and micro businesses to get them established. Reducing the impact of employment law on businesses who need to backtrack after taking a risk that didn’t pay off has encouraged more to take the risk in the first place.

Secondly, small business organisations and educational bodies talked up self-employment and entrepreneurship, particularly to young people. Many more young people plan to or have already set up entrepreneurial enterprises covering a wide range of businesses from catering to IT and more traditional crafts.

Thirdly we live in a knowledge-based world. Professionals released from senior roles in large corporations have taken the plunge free from the bureaucracy and corporate politics of the past. Often contracting themselves back to their old employer they have seized opportunities to work flexibly and remotely. Loose alliances of professionals form to meet specific project needs and break up when the task is done. Everybody is an “associate” of someone else and networking via social media and breakfast meetings, etc. builds relationships. Large employers like this way of working as it contracts costs and you pay for work when it is done. Taking the plunge for the mid-life professional has often been funded by a generous redundancy or pension payment and working initially at home free of overheads.

At the other end of the spectrum, IT whizzkids build new businesses reflecting new directions and opportunities. These lead to employment opportunities for developers and other technical staff. The web has led to greater internationalization and speed of interaction. The UK has led in many areas due to its innovative, entrepreneurial culture. Not a lot of upfront investment is needed to get started.

Finally, we are seeing the rise of the niche player. With greater consolidation by merger and acquisition of large organisations, product opportunities fall out creating niche businesses. In pharmaceuticals for example, small organisations are focusing on rare disease therapies and bio-tech drugs. Groups of scientists come together to develop new chemical or biological entities spun out of larger companies and universities. Venture capital funding has backed these new entities, again with tax breaks for new R&D investment. Niche players also exist in highly skilled crafts producing the premium product for a discerning market.

Interestingly, four Scandinavian countries are in the global top ten best places to start a business, with Denmark scoring higher than the UK. Seen traditionally as staid “social welfare” societies who support shorter working hours and vast employee benefits such as fully paid maternity leave, we need to change our thinking about their success in this area.

As you grow your business and start to hire contractors and employees, make sure that you have the right employment framework from the off. Recruiting the right people and getting the right HR advice will make a huge difference to your success and profitability (we have the perfect package of HR for SMEs do make sure you get in touch when the time is right!) New businesses do not always succeed but the key attribute of entrepreneurial cultures is to try again and again until you win – and you will.

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