COVID-19: ‘Record number of new businesses’ predicted as UK comes out of coronavirus lockdown

The COVID-19 pandemic has had a detrimental impact on many businesses across the UK.

In total, 396,155 firms closed in 2020, according to data from the Office for National Statistics.

Around 250,000 small businesses are expected to fold this year, according to the Federation of Small Businesses.

Certain industries, such as the beauty and tourism sectors, have struggled because of difficulties in adapting to the changes coronavirus has brought.

Others have bucked the trend, however, experiencing sharp rises in demand.

Food delivery services have recorded surges in demand over the last year, with takeaway and recipe boxes seeing a record number of sales.

Pasta Evangelists, a pasta delivery company, experienced a significant rise in the number of orders it was seeing on a daily basis.

Alessandro Savelli, founder of the company, told Sky News that business “grew more than five fold” and “what was previously the weekly volumes now is daily volumes”.

The business recruited more staff and had to adapt logistically to keep up with demand.

Mr Savelli said: “We chose to never stop our production. We chose to fulfil all the orders and therefore we buckled down and executed.

“We built quite a balanced business model, ultimately, and therefore we think our product will be consumed in different ways from the same consumers even after lockdown.”

Despite challenges introduced by the coronavirus crisis, 2020 also saw the launch of a record number of start-ups.

Around 407,510 new businesses were formed during this period, and Tasty Mates, a sweets company based in Hertfordshire, is one of them.

After starting work on their business two years ago, Joe Woolf and Nick Sunshine decided to hold their official launch last autumn.

Mr Woolf told Sky News: “I left my job in January just before COVID-19 – ready to get this up and started.

“Then (the pandemic) hit and we just carried on throughout. We didn’t let it stop us. It definitely slowed us down, but we just carried on.”

He added: “We weren’t worried about going out and socialising and seeing friends. We were just focusing on the business and growing it and we didn’t feel like we were missing out on anything else.”

Mr Sunshine said: “It gave us the time to essentially plan everything out where things may have been rushed previously.

“We just tried to utilise the time that we had to make sure we got everything as good as possible.”

Matt Smith, director of policy and research at the Centre for Entrepreneurs, told Sky News the rising number of start-ups is a trend that is likely to continue.

He said: “A lot of people have had the opportunity to consider entrepreneurship for the first time and really pursue it.

“A lot of businesses have been set up that are passion projects and that of course is a challenge of making sure that is sustainable and scalable.”

Mr Smith added: “I think there will be a record number of business closures, but that is matched and exceeded by a record number of new businesses.”

Measures to support firms were announced by the chancellor in Wednesday’s budget.

The business rates holiday has been extended to June – after which a two-thirds discount for closed businesses will be in place until the end of the year.

Restart grants of up to £6,000 will also be available for non-essential businesses, and up to £18,000 for the hospitality and personal services sector.

VAT will also remain at 5% for food and drink until September.

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