Side hustles help boost business creation figures
A surge in etsy-style online traders, private tenant landlords and other “side hustles” has contributed to a surge in newly-incorporated businesses in Scotland.
More than 40,000 were set up in Scotland last year, an increase of 12% on 2022, making it the third highest-growth of any nation or region in the UK.
Of the total newly-created businesses, 2,440 were in the property letting space, while 2,148 were online retail businesses. Others included takeaways and street food vendors.
There was no further breakdown on how many companies were created in sectors such as technology, hospitality and transport.
The compilers said the list included businesses that are an additional source of income set up by individuals already in work.
Etsy is an e-commerce company focused on buying and selling items often made at home by art and craft workers.
The data is revealed in the Beauhurst and Royal Bank of Scotland’s New Startup Index which shows it was a record year for company incorporations across the UK with 900,000 set up, also a 12% increase on the previous 12 months. Northern Ireland (+59%) and London (+20%) showed the biggest growth.
There were a record 164,000 companies incorporated by women in the UK last year, up 4% on 2022 and taking growth in the five years between 2019 and 2023 to 26% overall.
The overall picture was offset by a 30-year high number of corporate insolvencies in England and Wales. The compilers accepted that not all new companies were new businesses but said that the broad upward trend was a positive sign of economic activity.
About 40,000 were subsidiaries of existing businesses, another 12,000 had been dissolved within a year.
Among the new companies were 500,000 that had filed only one document with Companies House in 2023. About 56,000 were set up by a single company director who was also a director of five or more other businesses.
James Holian, head of business banking at the Royal Bank of Scotland, said: “It’s absolutely brilliant news that some 40,000 new businesses have decided to make Scotland their home in 2023.
“These new ventures are predominantly small businesses, owned and run by local people, which will play a crucial role in supporting the growth of Scotland’s economy.”
A spokeswoman for RBS parent NatWest told Daily Business: “The number [in the property letting space] will include landlords with other jobs, but we can’t say how many.
“Similarly, the retail companies may include etsy shops but unfortunately the data doesn’t tell us how many.”
A separate annual study by the Office for National Statistics measuring businesses registered to pay VAT or salaries found that in the year to the beginning of 2023 there had been a fall in larger ventures. Only 337,000 new businesses were registered, while 345,000 were de-registered. This was the first time that the “business death rate” had exceeded the birth rate since 2010, the ONS said.