UK startup competition The Pitch has conducted independent research into entrepreneurship during Covid-19. Out of 2,000 UK adults surveyed, 11% said they wanted to start a business because of the crisis.
Around one-fifth of respondents want to start a business to give back to society. Other reasons for starting up include:
- Earn extra money (47%)
- Something to do (26%)
- I finally have the time to start a business (21%)
- Give back to society (17%)
- It’s my only option (16%)
History shows people are likely to start businesses during economic crises. After the 2008 recession, the number of new businesses incorporated in the UK grew by 11% to 365,600 in 2009. This figure then grew for seven successive years, according to Companies House statistics.
Further interesting data from The Pitch’s survey includes:
- The crisis has had a positive impact on starting up for 19% of people surveyed, who are either thinking about starting a business (7.94%), have launched one already (3.30%) or have more time to work on an existing idea (8.04%).
- In terms of the city, the number of people that want to start up because of the crisis is highest in London (11.35%), Sheffield (10.45%) and Newcastle (9.52%).
- 3.30% of people surveyed have launched a business already because of the crisis. That’s highest in Brighton (5.08%), Glasgow (6.02%) and Birmingham (4.95%).
- Not everyone’s taking action. While 12.62% of students have thought about starting up because of the crisis, only 1.94% have – the lowest of any employment group apart from parents and retired people.
- The crisis has made 18.37% of C-level executives and 15.63% of senior managers think about starting up, considerably higher than entry-level staff (11.35%) and middle management (8.84%).
- Of those that have been put off starting a business by the crisis, 40.76% say it’s because “It’s too risky, I want the security of employment” and 39.67% because they are worried about the economy.
- What practical steps have people taken towards starting up? Of those that are interested, 16.25% have started a plan of action, 11.02% have spoken to a financial adviser, 10.92% have spoken to potential customers and 9.52% have registered a company
- There’s a new wave of side hustles being started because of the crisis. Out of the different employment types, the most likely people to have started a business because of the crisis are part-time workers (5.32%) and full-time employees (4.76%).
The Pitch, which was launched in 2008, helps startups create a brilliant pitch and gives them the platform to use it. In response to the increased interest in starting up and the need for support, The Pitch is offering every applicant free one-on-one sessions covering everything from marketing to cashflow.
People that want to apply can do so on The Pitch’s website. The competition helps people with ideas and small businesses that have been trading for up to three years. The Pitch will run five free, day-long business boot camps across the country to find the UK’s most exciting new startups before The Pitch Final in November.
“We know business is tougher than ever right now. We also know that amazing, world-changing businesses will be built during the crisis.
“Every year, we see The Pitch finalists trying to solve some of the biggest challenges we face, from mental health to tackling food waste. There’s no doubt the UK’s entrepreneurs are going to step up in the wake of the coronavirus crisis too,” said Chris Goodfellow, founder of Box 2 Media, which runs The Pitch.
Several of The Pitch judges founded their businesses during recessions and went on to build hugely successful companies, including Crowdcube and Moneypenny.
Luke Lang co-founded equity crowdfunding platform Crowdcube with a mission to democratise investment in 2009.
“I’m a strong believer that difficult economic times are a breeding ground for innovation; it’s no coincidence to me that the likes of Funding Circle, Crowdcube and Ratesetter emerged from the banking crisis.
“Britain has a proud history of innovation, enterprise and entrepreneurship and it’s vital we continue to support our startup community, who will be crucial in helping our economy emerge from this crisis,” Luke said.
Ed Reeves co-founded answering service Moneypenny, which now has over 600 staff and supports thousands of businesses, during the early-00s downturn.
“Moneypenny was born as we entered a tumultuous few years of recession. There wasn’t a single person who felt it was a good time to start trading, including pretty much every potential investor.
“Out of adversity comes opportunity. I’d happily accept that businesses and individuals might be spending less of their hard-earned cash, but that that would mean they’d be open to new ways of working. We’re there again now and any entrepreneurial business that capitalises on that period is my kind of investment,” he said.