Despite some encouraging signs over recent weeks, the UK economy remains sluggish. In fact, it could only be a matter of time before we are officially in the double dip recession many economists have been predicting.
This will come as no surprise to families already struggling to pay essential household bills, who might argue that it feels as though we are in a recession already.
While this is undoubtedly bad news for many businesses, particularly retail commercial properties selling non-essential goods, it could be the perfect time to launch your own small business.
Nigel Botterill, of business mentoring foundation Entrepreneur’s Circle, told the Telegraph; “We know historically that the time when most millionaires are created is during a recession and just after.”
This is based on sound reasoning and business sense. With many companies shedding staff, there is an abundance of experienced workers with the know-how and finance to launch a start-up. These one man bands have few overheads and can capitalise on the difficulties facing more established competitors.
This potential for growth is increased by government measures aimed at promoting enterprise and assisting small businesses. This can make raising finance easier for start-ups than for other companies.
In addition, many local councils offer support packages to budding entrepreneurs, ranging from face to face advice sessions to help in finding commercial properties. Another factor in favour of start-ups is the extension of small business rates relief which could mean businesses in the early stages of establishment could soon be receiving 100% relief.
Together these factors have led to a boom in business start-ups. During 2011 the number of new businesses launched rose by 20% to 471,000. The South East, and London in particular, saw the largest increase in start-ups, but the picture was repeated across the UK with increasing numbers of women and the over 50s displaying a strong entrepreneurial spirit.
With this trend set to continue in 2012, it is worth pointing out that this could also be the ideal time for small businesses to buy commercial property. Just like the residential market, the commercial property market is cyclical.
The pattern it follows begins with recession – the current state of the market – before moving onto the stages of recovery and expansion. Finally, a period of contraction will signal the cycle repeating itself.
The recessionary stage is undoubtedly the best time to buy commercial property. It is during this period that prices are the lowest, as landlords find it difficult to find occupiers and many commercial properties are vacant.
This makes a recession a buyer’s market as far as shops, offices, warehouses and other types of commercial property are concerned. It is at this time that small businesses will be able to get the most favourable deals and secure properties in prime locations that they would perhaps be unable to afford at any other time in the cycle.
So if you are one of the increasing numbers of people considering a business start-up this year you will find that, while the economic outlook is be bleak, it can present opportunities to anyone providing in demand services. In addition, you could find your first commercial property at a price to match your budget.
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