Businesses incorporated last year lasted 164 days on average
Real Business Rescue analysed the 6,928 businesses which were incorporated and dissolved in 2022, to reveal the areas and industries where new businesses struggled the most. According to their analysis, businesses incorporated last year lasted on average just 164 days.
The analysis also revealed that online retail stores were the hardest hit of the top 20 new businesses in 2022 which have since been dissolved, followed by buying or holding property and renting it out (second) and hairdressing and other beauty treatments (third).
Almost 7,000 UK businesses less than a year old were dissolved in 2022, and more than one in five (22%) were London-based. Birmingham was the second worst-hit area for new business becoming dissolved in 2022, followed by Cardiff (third) and Manchester (fourth).
The most common length of time a business lasted was just 92 days, with 139 newly-founded companies lasting this long. This was followed by 91 days (126 companies) and 95 days (115 companies).
Shaun Barton, National Online Business Operations Director at Real Business Rescue, comments: “Our research has highlighted the intense strain put on new businesses over the last year, as almost 7,000 businesses in their first year of trading were dissolved in 2022, with the average of these businesses lasting just 164 days. While there are a whole host of reasons to strike off a company, for these new businesses, it is likely that they never got off the ground at all.
“Many small businesses saw demand for their products and services fall as the economy struggled for growth and consumers reined in their spending. Rising inflation and soaring interest rates affected all businesses new and old and, despite introducing government support programmes, the sharp increase in energy bills has also contributed to the struggles facing businesses over the past few months.
“Now with the government scaling back support and protection for businesses in relation to their energy bills from April 2023, we expect to see corporate insolvency and liquidation rates rise considerably in the coming months. New businesses formed this year are doing so in a particularly volatile environment. With the limited support, this could put even more pressure on start-ups getting off the ground than what we saw last year.”