Five-year high for UK entrepreneurial performance

New research shows that Britain is enjoying a five-year high in opportunities for entrepreneurs, with a 10 per cent increase in entrepreneurial performance since 2011.

Barclays’ eighth Entrepreneurs Index[1] considers environmental measures, such as access to finance and talent, along with entrepreneurial outcomes, such as growth and exit activity, in order to assess the strength of the UK’s entrepreneurial environment.

From December 2015 to June 2016, there was a 4 per cent rise in the number of active businesses from December 2015 to June 2016, equating to 345,000 new incorporations. This was driven by increased access to finance and skills, and also improvements in regulation and research and innovation, all of which created optimal conditions for enterprise in the UK.

The Index also shows an increase in the number of business exits, with a 19 per cent rise in the number of mergers and acquisitions (M&A) of companies less than five years old, and a record high number of deals from December 2015 to June 2016, up 32.8 per cent. This jump was led by the UK services sector which was responsible for the majority of deals, followed by financial services, industrial products and services, and computer software.

A sharp fall in IPO activity of businesses under five years old by 36 per cent could indicate a lack of confidence in companies looking to expand within the current economic market.

The construction sector created the most high-growth companies, while business services, agriculture, retail and customer services were all above the UK average.

Akshaya Bhargava, Chief Executive, Wealth, Entrepreneurs and Business Banking at Barclays said: “Uncertainty is part of everyday life for entrepreneurs and those that succeed navigate unchartered waters and adapt to find opportunities to thrive.

“This year’s Entrepreneurs Index shows that before the EU Referendum, regulations and conditions for entrepreneurs had improved, making it easier to start a business and contributed to a rise in M&A. Until the outcome is fully known, it’s vital that we do everything in our power to deliver a strong environment to sustain UK entrepreneurial growth.”

In other news, the annual Paying Taxes report[2], produced by the World Bank and published this week, shows that Britain has risen to tenth place in the global business-friendly tax rankings. The five-place promotion has been credited to cuts in corporation tax and the responsiveness of HM Revenue & Customs.

At Beavis Morgan, we specialise in working with startups and entrepreneurial people across a wide range of sectors, helping them achieve their business ambitions through each stage of the business lifecycle. We have also acted on significant number of M&A deals for SME and owner-managed businesses. We too are entrepreneurs and have done deals as principals and as advisers to clients.

If you would like to find out more about how we can assist you with your entrepreneurial ideas and business aspirations, contact Steve Govey or your usual Beavis Morgan Partner.

[1] Barclays Entrepreneurs Index

[2] Paying Taxes 2017: The Global Picture