The economic slump has cost thousands of people their jobs in the North East and many of them are now setting up their own companies. Karen Dent takes a look at the new wave of entrepreneurialism.
LOSING a job or the threat of redundancy appears to be a key factor in the recent increase in the number of people considering starting up their own businesses in the North East.
Financial Inclusion Newcastle (FIN), a one-stop-shop to help potential entrepreneurs formulate their ideas and then get them off the ground, has seen a noticeable rise in enquiries from the underprivileged areas of the city’s East and West ends where it works.
Jonathan Dowden, start-up manager at the Entrust-backed FIN, said: “We’re definitely seeing a noticeable increase, certainly people are considering starting a business.
“There’s always been that underlying demand for working for yourself, but since the economy went into recession the number of enquiries has increased.”
Although recessions are tough on everyone, he believes that those which start in a difficult economic climate are not really at a disadvantage to those firms set up in better times.
“It’s very difficult to take this view, but actually there has never been a better time to start a business,” says Dowden.
“You are far more cautious, you are likely to do a lot more work on the background and you are very cautious of taking on extra unnecessary overheads.”
FIN is able to work with people from the moment they start to think about becoming self-employed and often finds itself helping clients come to terms with redundancy.
“We find when we’re speaking to clients, we have to support them to overcome the initial shock,” he said.
“Once they come to terms with that, people start to think, ‘Can I continue what I was doing on a self-employed basis? Have I got a hobby, skill or interest, or do I go completely the other way and do what I want to do?’”
A number of new entrepreneurs, especially those employed in the public sector who are facing the spectre of losing their jobs as funding is slashed, are now considering turning their hobby into an enterprise to serve as a safety net.
This type of niche business also stands a better chance of survival these days because of the interconnected nature of society since the advent of mass social networking.
“These days we are so much more connected,” explains Dowden. “We can take these niche businesses with social media like Facebook and Twitter and find people we can do business with – ideas that might not have been particularly viable previously because there were not enough customers.
“That’s not an insignificant element to this.”
Reflecting the trend to transform a hobby or interest into a business, FIN is now dealing with a hugely diverse range of ideas.
That was very much in evidence at a recent celebration at the Mansion House in Jesmond, where 32 start-ups gathered to show off their goods and services to key figures in the region’s business community.
“They’re quite diverse. At the event we had everything from cup cake business Cake, a guy who designs the best hi-fi speakers you’ve ever seen, there was web design, pottery, crafts for school kids and animation to engage children at school,” says Dowden. “It’s a massive range.”
