Is Britain really one of the best places in the world to start a business? And how many startups are there in a given year here?
We first pulled together our list of start up statistics back in 2020. But here we are in 2021. So what are the latest figures. We’ve updated this as of June 2021.
Startup Statistics UK – The Quick Version
We pulled together some data from the UK Companies register for the past 6 years.
|Total number of Companies in the UK||3,896,755||4,033,355||4,202,044||4,350,913||4,716,126||4,894,356|
|New Company Start Ups||664,750||620,285||672,890||665,495||810,316||753,168|
|% of companies surviving 1 year||95.2%||93.7%||94.8%||94.6%||92.9%||n/a|
Want the quick version? Here are the biggest figures:
- 2020-2021 say over 800,000 new incorporations, the biggest number in UK history for one year.
- 753,168 new companies were set up between March 2021 and March 2022. Although this is a decrease the record set the previous year, it is still the second highest number of incorporations in UK history.
- The company register reached 4,000,000 companies in 2016-2017, and it is likely to hit 5,000,000 by March 2023.
- In 2021-22, more than 2,000 companies a day were incorporated.
- Only 38.4% of companies set up in 2016 survived for 5 years
- 8.1% of companies incorporated in the record 2020-2021 year were dissolved within 1 year (the highest percentage for 5 years).
For further context and sources please read on.
How Many Startups Are There?
Crikey. Ever tried finding a simple definition of a start up? It’s next to impossible. You get everything from one person limited companies who’ve just formed through to 2 year old tech giants referring to themselves in this way. So let’s keep it simple.
- 753,168 new companies were incorporated in the UK in the tax year ending March 2022 (source)
- This was around a 7% drop from the 810,316 record in 2020/2021, but that year was still the second highest on record.
- The 2020/2021 number was a massive 21% up on the previous years number of incorporations (665,495)
- That’s more than 1 company formation per minute in both of those tax years.
That’s over 1.5 million new start ups in the UK in the last 2 years according the most recent data releases from Government.
Of course, not all of them will be turning over anything right now. Not all of them ever will. But it’s an incredibly testament to entrepreneurial spirit to see so many newly started businesses over a time period that came with so much political uncertainty.
Start Up Success Rates in the UK
Ok, ok. So aspiring British business magnates are setting up around one company per minute here in the UK. But how many of them are actually succeeding?
Again, there’s no simple success statistics for start ups because metrics and defining success is so complicated. But here are some fairly alarming statistics:
- 61.6% of businesses started in 2016-17 were gone by the end of March 2021. In other words, just over a third of UK start ups make it beyond 5 years (source)
But let’s not be all doom and gloomy. You may well not consider a business even close to being a start up by year 5. So what about that all important first year?
- At least 92% of start ups founded since 2016 have survived their first year (source)
That’s something to shout about, right? Here are some viewpoints from myself and a good friend Hana Bednarova on that important first year in a start up.
Start Up Aspiration in the UK
How many people actually have any desire at all to become the start ups of tomorrow?
Back in January 2020, we wrote:
We based our assumption on the Google Trends graph shown above. Our prediction was close, but it didn’t quite pass the interest show in this keyword from July 2011.
However, as you can see from the updated Google Trends graph below, interest in this keyword has continued to increase. January 2020 saw relative interest of around 87%. Interest saw its peak in February 2021 and it got very close to the peak again in January 2022 with 97%.
The average number of searches has increased slightly to around 18,400 over the last 2 years, from 18,100 in 2020.
We surveyed 1,000 UK employed adults using Google Surveys in January 2020. We asked a simple question:
“Do you want to start your own business.”
- 65% of adults in the UK want to start their own business
- 21% do not want to start a business
- 14% are not sure
So that’s almost two thirds of the British workforce as of January 2020 that wants to start its own business.
Startup Scene in 2023
It’s clear the UK’s startup scene is bustling in 2022 and is likely to continue into 2023. It will be interesting to see the number of startups announced for 2022-23 – especially with the current cost of living crisis etc. And, if previous years are to go by, almost all will celebrate their first birthday.
With two thirds of the workforce keen to start their own ventures, could the number of start ups increase even further in the years to come?
Let’s Google That
The overwhelming majority of us will turn to Google for facts, figures and information for pretty much anything in life, from hairstyles to health related issues and even business start up guidance.
So we took a quick look at how many people each month in the UK (based on an average of the last 12 months using statistics from kwfinder.com) look for help setting up a business:
- 18,400 people per month search “how to start a business” in the UK (down from 22,000 in 2020)
- 20,500 search “business ideas” (down from 24,800 in 2020)
- 7,200 search “start up loans” (down from 9,300 in 2020)
In all 3 cases, these keywords peaked in and around 2020, which coincided with the record number of new start-ups in 2020 and 2021.
We wrote in 2020:
This assumption proved to be correct, as only a few months later, Companies House would show a record number of new business start ups.
It could be difficult to predict what the numbers will look like when the figures are released in 2023. 2022 was down on 2021 (albeit with still the second highest number ever). Will the trend continue downwards, or will it stay close to the same number? Maybe the massive increases in costs to businesses throughout 2022 and 2023 will show fewer start ups and more dissolutions.
It will be interesting to find out later in 2023 what the situation is.
If you’re a startup or thinking of starting. up, you may find this useful – our round up of start up and small business grants in the UK. There are a lot of cash grants and free support options available.