People in Dorset 'put off' starting businesses as numbers plummet
It's due to access to finances, increased competition and tougher employment legislation
Dorset Chamber’s CEO has called for the government to "ease pressures” on new businesses as the number of startups continue to drop.
There’s been a decline in the number of people wanting to set up their own business this year as well, as many fear walking away from a ‘steady income’.
Economists believe the attractiveness of the UK as a business location has weakened since the Budget was announced.
Ian Girling, CEO of Dorset Chamber of Commerce, told us: “Starting a business is really challenging. The percentage of startups that fail are always quite high and many don’t make it to three years.
“It's a big step for someone to move out employment, earning a decent salary and a steady income, to go and start a business.”
1\3 of the 16 main industrial groups saw a fall in the number of businesses created over the past year.
According to the Office for National Statistics, 65,450 new businesses were created across the UK in the three months to December, down 8.5% from the same quarter a year earlier.
Following the “concerning” drop in business births, experts in the industry are urging the Government to alleviate financial and recruiting pressures on businesses.
Mr Girling said: “There’s been a decline in business confidence since the budget was announced.
“The rise in national insurance contributions and minimum wage hike as well as reforms to employment law seem to have cooled the attractiveness of running a business.
“Access to finance is a real challenge for many businesses as well. Banks potentially aren’t as interested in lending money to new businesses that are untested.”
Recent polling shows that addressing the tax burden on business is crucial for lifting business confidence, followed by a scaling back of employment regulations.
Mr Girling also urges businesses to seek advice: “the survival rates for businesses that take advice are much higher than businesses that don't, and most businesses go wrong because of the failure of business skills, as opposed to not being good at what they do.
“Business skills should not be underestimated and I think it's really important that the government has a strong focus on that and a really strong strategy for supporting new businesses.”
A Government spokesperson said: "We're backing British business through our Plan for Change, which includes tackling the scourge of late payments and introducing a fairer business rates system which incentivises investment."