Entrepreneurship is thriving in Kent and it’s showing no signs of stopping. Start-ups are being supported from every angle – by the University, the Council and the Angel Investing Group, Kent Investors Network. Kent Investors Network is receiving some superb quality applications, making the selection process for who pitches to investors at the Kent Business School on Monday January 22 very challenging.
How does Kent stack up against the rest of the country?
Kent is the second strongest county for entrepreneurship (following Surrey) in the South East. It accounts for roughly 23% of new businesses in England (excluding London). The vast majority of enterprises in Kent (90%) are micro enterprises with 0‐9 employees, demonstrating that small businesses are the backbone of Kent’s economy. Funding these small businesses will only stimulate further growth.
The number of start-ups has increased in the county by 395 businesses (+4.7%) through 2017 – significantly above the 0.7% total for the South East region but behind the Great Britain average of 8.2%. Moreover Kent businesses are surviving, with 91% of start-ups still trading after one year which is above the national average1. Overall, the county is a strong performer both regionally and nationally.
Is the UK flourishing with entrepreneurship?
Later this month we will see full reports of 2017’s performance, but the early indicators are impressive. The average deal size in 2017 was £6.3 million which is almost double that of 2016 (£3.3 million). Last year’s high levels of investment were partly due to two of the biggest deals on record; £389 million for gaming technology company, Improbable, and £313 million for luxury fashion outlet, FarFetch. The total amount invested in start-ups increased by 74.7% from 2016 to a record £3.03 billion. However, don’t believe the money is only pouring into already successful companies; early stage deals (<£500k) are the most numerous, closely followed by deals between £2 million and £5 million.
The number of deals involving funds headquartered outside the UK also continued to grow in 2017, rising by 27% from the previous quarter2 and demonstrating that Brexit has not deterred foreign investors from putting their money behind UK start-ups.
Is 2018 your year to take a leap into the ‘Wild West’ of entrepreneurship?
Simon Cook, Leader of Canterbury City Council and the Conservative Group, thinks so;
“It’s never been so easy to start a business. Modern communication technology means business can be done from almost anywhere – and customers can buy from almost anywhere.”
So if you have fire in your belly and believe now is the time to start your business, 2018 could be your year. If you are not sure what type of business to found, consider a knowledge-intensive business. The announcement of the doubling of the annual allowance for those investing in knowledge-intensive companies through enterprise investment, made by the Chancellor in the Autumn Budget, means more Angel Investors will enjoy tax relief.
That said, if this was so easy then wouldn’t everyone be doing it? Simon Cook highlights the importance of thriving and not just surviving;
“If starting is easy, thriving is a whole different issue. I think there are three key things that will influence whether start-ups thrive or fail this year. There needs to be a clear path to obtaining support, whether it’s in writing a business plan, setting up a bank account or applying for a patent. There needs to be cheap, modern and well-connected office space ready for when start-ups make that first move out of the bedroom or garage. And most importantly, entrepreneurs need the self-belief, determination and commitment to overcome all the challenges that will come their way.”
The key to thriving is having the ‘picks and shovels’ and unlimited resilience. Kent Business School, Kent County Council, Business in Maidstone and the Kent Investors Network can provide rich support for the ‘picks and shovels’ such as business plan templates, office space and funding options. As for resilience, that’s down to you!
Smart money leads to smart decisions
This year may also see a move away from crowdfunding and a re-energising of Angel groups. Crowdfunding deal numbers fell by 18.4% from Q1 to Q2 in 20172. Start-ups may be turning back to Angel Groups, such as Kent Investors Network, that bring ‘smart’ money – that is to say both capital and knowledge. Entrepreneurs need all the help they can get and seeking Angel investment, which comes with advice, guidance and contacts, can be worth twice the monetary value. While there are always winners and losers, it was reported that on average, 75% of an Angel’s portfolio has experienced an increased level of turnover growth, with 80% having undergone employment growth. It was also highlighted that the concentration of angel investors in London and the South East increased3.
1Kent County Council, Research & Evaluation Statistical Bulletin November 2017
3Research by the British Business Bank and the UK Business Angels Association (UKBAA)
Thank you to Christina for sharing her thoughts on entrepreneurship in Kent. If you would like more information or would like to to join the Kent Investors Network, visit www.kentinvestorsnetwork.co.uk or contact Christina at firstname.lastname@example.org.
Christina Mackay is the CEO of Kent Investors Network, a group of 30 Angel Investors supporting entrepreneurship across the South East.