We know business is tougher than ever right now. We also know that amazing, world-changing businesses will be built during the crisis.
To find out more about how people are coping, The Pitch conducted independent research into entrepreneurship during COVID-19. Out of 2,000 UK adults surveyed, 11% said they wanted to start a business because of the crisis.
This matches the experience of past downturns. After the 2008 recession, the number of new businesses incorporated in the UK grew by 11% to 365,600 in 2009. This figure then grew for seven successive years.
Why are people starting businesses?
Around one-fifth of respondents want to start a business to give back to society. Other reasons for starting up include:
- Earn extra money (47%)
- Something to do (26%)
- I finally have the time to start a business (21%)
- It’s my only option (16%)
There’s a new wave of side hustles starting because of the crisis too. Out of the different employment types, part-time workers (5%) and full-time employees (4%) are most likely to start a business.
Can businesses succeed in a recession?
Several of The Pitch 2020 judges founded their businesses during recessions and went on to build hugely successful companies, including Crowdcube and Moneypenny.
Luke Lang co-founded equity crowdfunding platform Crowdcube with a mission to democratise investment in 2009.
“I’m a strong believer that difficult economic times are a breeding ground for innovation; it’s no coincidence to me that the likes of Funding Circle, Crowdcube and Ratesetter emerged from the banking crisis.
“Britain has a proud history of innovation, enterprise and entrepreneurship and it’s vital we continue to support our startup community, who will be crucial in helping our economy emerge from this crisis,” Luke said.
Britain has a proud history of innovation, enterprise and entrepreneurship and it’s vital we continue to support our startup community
Ed Reeves co-founded answering service Moneypenny during the early-00s downturn. It now has over 1,000 staff and supports thousands of businesses.
“Moneypenny was born as we entered a tumultuous few years of recession. There wasn’t a single person who felt it was a good time to start trading, including pretty much every potential investor.
“Out of adversity comes opportunity. I’d happily accept that businesses and individuals might be spending less of their hard-earned cash, but that that would mean they’d be open to new ways of working. We’re there again now and any entrepreneurial business that capitalises on that period is my kind of investment,” he said.
How is The Pitch responding to COVID-19?
In response to the increased interest in starting up and the need for support, The Pitch is offering every applicant free one-on-one sessions covering everything from marketing to cashflow.
We’re also running five free, day-long business boot camps across the country to find the UK’s most exciting new startups before The Pitch Final in November.
“Every year, we see The Pitch finalists trying to solve some of the biggest challenges we face, from mental health to tackling food waste. There’s no doubt the UK’s entrepreneurs are going to step up in the wake of the coronavirus crisis too,” said Chris Goodfellow, founder of Inkwell, which runs The Pitch.