It is no secret that the coronavirus pandemic has uprooted and reshaped the world of business. In the past twelve months, people have been unable to find work in industries they have decades of experience in. Careers have stalled, and firms thriving pre-pandemic have been forced to rethink their entire way of operating.

It’s been an incredibly difficult year, but out of the coronavirus chaos comes a generation of exciting entrepreneurs leading a new business boom – what some are calling covid-preneurs.

The rise of the lockdown-preneur

Whilst the 31-40 age group are still most likely to set out as sole traders, and have been for the past five years, the most significant level of new business growth is among 16–20-year-olds. The literal age of entrepreneurialism is decreasing rapidly.

Who are the lockdown-preneurs?

Since 1st February 2017, there has been a 206% increase in 16-20-year-olds registering as sole traders, showing the ambitious nature of Gen Z. Today, those under 30 account for four in 10 new businesses, versus 30% of new businesses three years ago.

Sole-trader age when starting a business (as a percentage of the total for that year)

In 2020, 72% more 16-20-year-olds started a business than the previous year, while all other age groups experienced fewer new businesses.

The current era of uncertainty, characterised by fewer job vacancies and the disproportionate impact on sectors which typically employ younger people, has encouraged Gen-Z to take their earning powers into their own hands.

Age of sole traders starting a business shown as a percentage change from the previous year

Age of sole traders starting a business shown as a percentage change between 2017 and 2021

While there are rapid shifts in the age make-up of entrepreneurs, the gender split is static with men more likely to start a business. Males make up 71% of new sole traders in total, and this is reflected in every age group. In 16-20-year-olds, women are 80% less likely to start a new business than men.

Limited company owner/director age when starting a business (as a percentage of the total for that year)

Age of limited company owner/director starting a business shown as a percentage change from the previous year

Age of limited company owner/director starting a business shown as a percentage change between 2017 and 2021

Why Gen Z is experiencing a business boom

The barriers to starting a business are lower than ever, especially for Gen-Z – the first digitally native generation. The ease of buying and selling products online, with little initial cost, is helping propel Gen-Z as a generation of entrepreneurs harnessing the power of social media to create businesses.

Social media has become a petri-dish of new business start-ups. Of the business started in 2020:

• 31.2% of those began on Facebook.
• 30.9% started on Instagram.

Ecommerce platform, Shopify, on which 10.6% of businesses were started, saw a 71% growth in merchants in Q2 2020. Even established businesses are looking for ways to ramp up their online and eCommerce activities.
 

Where start-ups are starting

Last year, almost half a million (468,371) new businesses were registered in the UK, with retail, management consultancy and real estate making up the top three most popular start-up sectors. London, Birmingham, and Manchester are home to the highest proportions of 2020 start-ups.

Most popular start-up sectors

• Retail sales: 4.7%
• Management consultancy: 3.6%
• Buying and selling of own real estate: 3.6%
• Freight transport via road: 2.3%
• Building developer: 2.0%
• IT consultancy: 1.9%
• Takeaway food shops/mobile food stand: 1.9%
• Hairdressing and beauty treatments: 1.5%
• Domestic construction: 1.5%
• Business and software development: 1.2%

Top UK cities for new business registrations

1. London: 26.3%
2. Birmingham: 2.3%
3. Manchester: 2.1%
4. Glasgow: 1.3%
5. Leicester: 1.2%
6. Leeds: 1.1%
7. Bristol: 1.0%
8. Liverpool: 1.0%
9. Nottingham: 0.8%
10. Ilford: 0.7%

Learn more about our online accounting services for start-up businesses. Talk to the team on 020 3355 4047, or grab an instant quote online.