UK startups forecast strong growth despite business gloom

Almost 90 per cent of startups are expecting to grow sales next year

A quarter of startups believe they will increase sales by more than 25 per cent (MLADEN ANTONOV/AFP/Getty Images)

UK startups are forecasting strong growth over the next 12 months despite signs of diminishing business confidence, new research shows.

Almost 90 per cent of startups are expecting to grow sales next year, while 47 per cent are forecasting double-digit growth, according to research by the Government-backed Start Up Loans Company.

A quarter of startups believe they will increase sales by more than 25 per cent.

Tim Sawyer, chief executive of Startup Up Loans, said the findings underlined the resilience of the startup community.

“It’s not surprising to see the business community at large pause for thought, given the political uncertainty of recent weeks, but our own research shows that founders of start-ups are a resilient breed and their own ambitions remain almost entirely unaffected,” he said.

“Of course there are challenges, but when you’re determined to start and grow a business, nothing stands in your way. What’s more, there’s help at hand, from mentoring schemes and business advice, to ensure start-ups get all the support they need to survive and thrive.”

Start Up Loans merged with the British Business Bank earlier this year and provides low-interest funding to new and established microbusinesses. It polled 630 bosses at companies that have launched within the last 12 months.

Earlier this month Chancellor Philip Hammond announced that the Government would step up startup funding ahead of the UK’s exit from the EU. Startups in sectors such as tech and life sciences can currently draw on support from the European Investment Fund, but concerns had been raised over the withdrawal of EU funding when the UK leaves the bloc.

Leading figures from the tech sector have also warned against the UK leaving the single market. Claire Cockerton, the head of Plexal, a flexible workspace for startups, said this month that a hard Brexit could dry up investment and stifle the influx of EU workers, who make up 40 per cent of the sector’s workforce.