The number of new businesses set up in the East Midlands has begun to rise once more, after a steep and sustained fall in May following the announcement of the General Election.
This is according to the Midlands branch of national insolvency and restructuring trade body R3 and is based on a monthly analysis of regional start-up data from business intelligence provider Creditsafe.
R3’s figures indicate there were 2,249 companies set up in the East Midlands in July, which is a rise of 5.04% in comparison with the June figure, and 8.33% higher than the 2,076 start-ups in May.
R3’s data also show some improvement in the wider local economy as debts owed by East Midlands businesses in liquidation decreased by 10.95% last month against the previous month, and by 37.11% compared to January.
The broader economic picture remains unpredictable, however, as the number of East Midlands companies with late payments on their books has risen steadily since the start of the year, reaching 23,917 last month compared to 23,194 in January.
R3 Midlands chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “It’s encouraging to see entrepreneurs becoming more confident and willing to push ahead with their new business plans. Lower inflation and the prospect of greater sales opportunities appear to be having some effect.
“However, we have yet to see the full impact of the General Election on the economy and purchasing decisions, and many directors of potential start-ups – and existing businesses – are concerned about customer demand, staff turnover and meeting regulatory requirements.
“With economic instability a driving factor, the new Government has committed to a number of policies designed to boost our local business community. The pledge to reform business rates to be fairer may benefit many East Midlands companies, particularly those in the retail and hospitality sector.
“Plans to introduce legislation to tackle late payments, if effective, will improve cashflow for local businesses – especially valuable for vulnerable start-ups – and could free up resources to allow firms to focus on investment and growth rather than chasing up overdue invoices.
“Such measures will, undoubtedly, take time to introduce. Therefore, R3’s advice to any directors worried about the viability of their company, start-up or otherwise, is to seek professional help and to do it as soon as possible. Many R3 Midlands members offer a free initial consultation to those who wish to explore their options.”
