Region's start-ups rise despite historical summer lull and rising interest rates - report

Entrepreneurial spirit in the West Midlands has not been dampened by the wet weather and any historical summer lull, with the number of start-up businesses in the region increasing despite spiralling interest rates and the approach of the holiday season.

Research from the Midlands branch of R3, the UK's insolvency and restructuring trade body, shows that West Midlands start-ups rose by 4.30 per cent last month, from 5,677 in June to 5,921 in July. This contrasts with the same period last year when start-ups fell by 3.70 per cent.

R3 Midlands' figures, which are based on an analysis of data from business intelligence provider Creditsafe, also show that the monthly number of start-ups in the region has increased by over a half [50.20 per cent] since the end of last year, when December saw 3,942 businesses set up in the West Midlands.

The research further reveals that the monthly total of the region's businesses with late payments on their books has continued to fall consistently since the 2023 high in February but, despite the drops, the figures remain high, with July registering 45,342 local companies with overdue customer invoices.

R3 Midlands chair Stephen Rome (pictured), a director at law firm Thursfields, said: “It's evident that business confidence is still there in our region, despite sizeable economic challenges, not least yet another rise in interest rates.

“Some of the factors working in our favour are the lower cost of workspaces here compared to the capital, as well as our position at the centre of the UK transport network. For start-ups having to be particularly careful with their finances, the West Midlands is an appealing economic option.

“However, while there is still scope for growth in the current environment, it is crucial that our entrepreneurs receive the best support possible to overcome the current challenges, which include stubbornly high inflation, rising costs of materials and wages as well as a squeeze on consumer spending.

“Should significant cash flow difficulties arise, there is a significant amount which can be done to rescue local companies, beyond traditional insolvency solutions, if help is taken early enough.

“It's worth knowing that many R3 members offer a free initial consultation to those who want to explore their options.”