Start-ups hit record high, but what next?

Plenty of us suspected it and now some evidence that proves it: more people than ever before are starting their own business.Annual stats released by Barclays show a record 471,500 new businesses opened their doors in 2007, a 3% increase on the year before and the highest level since the bank started recording activity 20 years ago.During that period, there’s been a 17% increase with an average 393,000 businesses started each year. There are now 2.93 million businesses in the UK, equating to one company per 8.7 people of working age, an increase of 15% over the past 20 years.It’s not all good news, though. During the last downturn in 1992, business closures reached 18% from an average of 14% and start-ups plunged to 290,000.Closures dropped as low as 11% in 2003 but climbed to 17% last year. With the economic climate only expected to worsen, it’s reasonable to assume the number of closures will remain high – but does this necessarily mean start-ups will drop?Possibly. If you’re struggling to pay your mortgage you’ll be less inclined to forgo a salary and we’re already seeing banks pulling back credit.That said, it’s so much easier to start a business than in ’92. Technology and the internet have reduced the barriers to entry so significantly that it's now possible to at least start a business with nothing but a laptop and a mobile.Grow one? Now that’s a different story…

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