While London is one of the biggest common business hives in the world, the UK is teetering on the verge of a recession and business leaders will assuredly face many headaches in 2023. Despite the bleak outlook, there also promises to be various opportunities to succeed in the startup space.
Richard Osborne, CEO of UK Business Forums (UKBF), the largest independently owned small business organisation in the UK with over 350,000 members, has highlighted his top three predictions for startups in 2023:
E-commerce businesses continue to boom in the post-pandemic world
The e-commerce boom is showing no signs of slowing post-pandemic. Comparing January 2022 to January 2023, the number of newly registered e-commerce businesses only experienced a 0.5% year-on-year drop.
Looking at the same timeframe, there were over 5,000 new e-commerce businesses registered every month except for last December, when business traditionally slows across every sector. Compared to pre-pandemic data, there were 2,913 e-commerce businesses registered in March 2019 – the highest total of 2018 and 2019, not to mention nearly half of every month in 2022.
One can reasonably conclude that the trend will continue well into 2023. For aspiring entrepreneurs or anyone with a strong passion for a particular hobby, starting a home-based side hustle has a very low barrier of entry. Expect more and more quirky online shops to continue to appear, offering a diverse range of unique products.
Birmingham and Manchester continue to rule the roost
Outside of London, Birmingham and Manchester have been the UK’s top new business hives for the past five years. From January 2018 to December 2022, there were 87,253 companies formed in Birmingham and a further 77,914 in Manchester.
While initiatives such as the government’s Levelling Up scheme aimed to re-distribute over-concentrated economic growth and spread research & development more equally across the UK, and taking the necessary first steps to enhance academic, cultural and economic success stories across the nation, it would be surprising to see the trend reversed in such a short space of time.
For comparison, the biggest start-up hotspot beyond Birmingham and Manchester over the past five years has been Glasgow, with 49,135 new companies formed, ahead of Leeds (39,465), Bristol (38,745) and Liverpool (38,089).
March is the busiest month of the year, while December is the slowest
Historic data trends show that March is the month in which the most companies are formed every year, by quite some distance. With the start of April marking the end of the financial year, financial advisors will often point their clients in the direction of investing in shares through a limited company.
Conversely, December is the slowest month of the year for businesses, with many entrepreneurs simply checking out to enjoy the holiday period. In 2022, wage disputes between Network Rail and rail staff grinded many businesses – particularly those independently owned – to a halt.
Richard Osborne, CEO of UK Business Forums commented:
“2023 forecasts as a difficult year in business as we continue to reel from the cost-of-living crisis, but there are still opportunities to succeed for savvy entrepreneurs. For instance, we can see that the e-commerce retail sector hasn’t suffered at all despite the financial squeeze, proving that consumers are still willing to pay for products that they genuinely want.
“Of course, if every entrepreneur could form a company selling products that everyone wants, then everyone would be an entrepreneur. This doesn’t discount that we can look at historic data trends to highlight some possible opportunities in the market where even those with no business background can start a home-based side hustle business and succeed.”
