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Optimism fuels rise in business start-ups

MORE than 10,000 people have started businesses in the latest financial year with support from the national business advice service, figures from the organisation have revealed.

LADIES WHO LAUNCH: Three Sisters Bake is run by Reith sisters Gillian, Linsey and Nichola. Picture: Kirsty Anderson
LADIES WHO LAUNCH: Three Sisters Bake is run by Reith sisters Gillian, Linsey and Nichola. Picture: Kirsty Anderson

The Business Gateway service said it advised 10,153 start-ups in the year to March up five per cent, 536, on the 9,617 it helped in the preceding year.

The organisation handled a record 48,280 enquiries from start-ups, an increase of 13 per cent on the 42,725 received in the preceding year.

Hugh Lightbody, chief officer of the national unit of Business Gateway, said while the increase may have been driven by the wider economic recovery the figures also reflect a growing entrepreneurial culture in Scotland

"It's about confidence, business and consumer confidence, but it's also about ambitions, attitudes. I think people are seeing there are opportunities," said Mr Lightbody.

He highlighted the work of a range of bodies he thought had positively influenced attitudes to entrepreneurship in Scotland.

Mr Lightbody cited the Entrepreneurial Spark programme for young firms, Prince's Trust Scotland, the Scottish Edge awards scheme funded by the Scottish Government and The Herald's SME Focus series.

Although the number of firms Business Gateway helped start up in the year to March was up on the previous 12 months, it was nine per cent lower than the 11,207 helped in 2011-12.

Mr Lightbody noted start up numbers increased in the wake of the global financial crisis of 2008, in line with the trend for starts ups to increase when labour market conditions are tough.

As conditions improved in the labour market in Scotland in the year to March, other drivers may have had a bigger effect on the start-up rate in that period. The Business Gateway numbers provide a more encouraging view of activity in Scotland than those compiled by the Committee of Scottish Clearing Banks.

Members of that organisation recorded an eight per cent fall in start ups in the year to March, to 11,410 compared with 12,465 in the preceding year.

The numbers only cover businesses opening business accounts with Royal Bank of Scotland, Lloyds Banking Group's Bank of Scotland and TSB arms and Clydesdale Bank.

Mr Lightbody said the numbers collected by Business Gateway showed it provided effective support for existing businesses as well as start ups.

The organisation handled a record 8,786 enquiries from existing businesses, up 21 per cent from around 7,200 in the preceding year.

Business Gateway provided intensive one to one support for over 2,600 growth companies in the latest year, compared with 1,700 the previous year.

The Three Sisters Bake food business run by Reith sisters Gillian, Nichola and Linsey received help from Business Gateway as a start up and then on the growth pipeline programme.

The support has ranged from help with how to access funding to more advanced strategic planning.

"It really has propelled what we were plodding away on ourselves," said Gillian Reith.

Mr Lightbody said: " The research we have indicates that those who do engage with us have a greater survival rate than those that don't."

Business Gateway said Office of National Statistics figures showed the national three-year survival rate is just over 60 per cent. For comparable businesses that have worked with Business Gateway, the survival rate is 81 per cent.

The figures cover businesses that started in Scotland in 2009 and were big enough to have to register for VAT within 18 months of starting up.

Enquiries to local offices increased by 63 per cent annually, to 22,413 in the latest year, from around 13,700 last time. Business Gateway launched a local adviser service in 2012.

The Federation of Small Businesses said the figures showed the Business Gateway brand is strong among Scotland's businesses.

"It's great news that more people are looking to set up in business and Gateway is the perfect place to start," said Colin Borland, the federation's head of external affairs in Scotland.

He added: "Most encouraging is the 21 per cent increase in the number of enquiries from existing businesses.

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