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Economic climate 'good for starting a business'

Published On 25 April 2007 at 11:57:01

The current economic situation in the UK makes it a good time to start a new small business, an industry expert has claimed.

Stephen Alambritis, a spokesperson for the Federation of Small Businesses (FSB), explained that current economic, financial and regulatory conditions made it a good time for someone to think about starting a new business venture.

Mr Alambritis added: "We estimate this year, about 500,000 people will set up in business."

However, the FSB warned that many of these new businesses will fail in a short space of time.

"Three in five of those [new businesses] will close down within three years. So there's a high churn rate," Mr Alambritis explained.

"That's the nature of the system in the UK. We accept there'll be a lot of start-ups and there'll be a lot of closures. But that churn rate is something that ministers are happy with."

One problem that many people face when trying to set up a new business is one of finance.

"There is a lot of help out there…but there is some confusion as to who does what, who gives what," Mr Alambritis commented.

"More and more people are trying to get money from family and friends first, wherever possible. Especially within the ethnic minorities, they do try, where possible, to finance themselves."

 

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