Yorkshire is a hotbed for business start-ups, but more needs to be done to help entrepreneurs with growth and stability, according to Virgin StartUp’s first annual report.
Yorkshire accounts for around 24,500 business start-ups a year and new firms are boosting employment numbers across the region with around 196,493 people being employed by a start-up in the county.
However, 42 per cent of new Yorkshire businesses don’t survive their first three years and the county is third bottom in the survival rates.
According to the think tank Demos, entrepreneurs in the region struggle with issues such as access to finance and rejection rates for business financial applications are now among the highest in the UK.
Virgin said a number of factors are contributing to the growth in start-ups across the region. Yorkshire has a rich history of engineering and manufacturing and the information sector is also contributing, having grown by 80 per cent since 2009. This is benefiting Leeds, which has the fifth largest volume of digital employment in the country.
Virgin said projections show that current trends will continue and 36,600 new Yorkshire businesses will launch in 2016 alone.
Sir Richard Branson, Virgin Group founder, said: “Yorkshire has a proud history of innovation, engineering and manufacturing – something I’ve come to learn even more about since we began operating the East Coast mainline.
“It’s clear that with the digital hub opening in Leeds and support for new businesses across the region, the county is a hotbed for entrepreneurs. Although we are seeing ideas and new businesses flourishing, there is still a problem with survival rates. We need more Virgin StartUp mentors to help these new businesses during their infancy years.”
One Yorkshire business to benefit from Virgin’s support is Shipley-based education technology company Titus Learning.
Seb Francis, the firm’s founder, said: “It’s so important for businesses to have the right plan and support network in place, which they can rely on when they face certain challenges and hurdles.
“We experienced first-hand the importance this plays in a business’s ability to grow and prosper, especially in the early days.
“Having the right support in place can be the difference between success and failure.
“Virgin StartUp do just that and have helped us enormously. As a company who now sees itself as established, we’re keen to help and support up and coming entrepreneurs on their journey, alongside Virgin StartUp.”
Virgin StartUp is a not-for-profit operation and is celebrating its third birthday, having allocated funding to 1,500 entrepreneurs worth £16.6m
The new report, The Start-Up Low Down: How Start-ups are changing Britain, released by Virgin StartUp in partnership with the Centre for Economics and Business Research (CEBR) revealed Yorkshire has a total of 68,800 businesses which are classed as start-ups.
The first annual Virgin StartUp report takes a macro look at the start-up environment around the UK.
Findings have shown the start-up economy is worth £196bn to the UK every year and 40 per cent of all active enterprises in the UK are classed as start-ups as they began their business life in the last three years.
Virgin StartUp supports entrepreneurs through the allocation of Government backed loans, assigning specialist mentors and dedicated business advisers.