UK’s small firms founded during pandemic face grim outlook as recession looms

theguardian.com:

Record numbers of people started businesses during the pandemic. Now there are record numbers winding up companies, hit by the stress of being the boss and compounded by the looming recession.

In 2020-21, 810,316 companies were set up, the highest number on record, and another 753,168 the following year, according to figures from Companies House.

But 581,824 companies were dissolved in 2021-22, another record and an annual rise of nearly a third, although some of those companies would have closed down earlier without support during the lockdowns.

This year is looking even worse for many small-business owners struggling with the cost of living crisis. A survey of 1,000 small-business owners by Opinium on behalf of Sage, the accounting software firm, found that 38% were on the brink of burnout, with 17% blaming rising energy prices, rocketing inflation and supply chain delays.

More than half said they were considering giving up altogether, and 54% said their mental health was affected by worries about their ability to hire and retain staff.

Sam Kennett started her digital marketing business, the Social Hand Grenade, at the beginning of the pandemic, after being made redundant.

“Because of the connections I’d made, I had a few clients I could take on board quite quickly,” she said. “Then lockdown really hit and no one was sure when we were going to come out of it. So lots of people cut back on their budgets, as companies do, and I lost most of my clients. I had to build it all back from scratch as we came out of lockdown.”

Things began to look up, and Kennett even managed to find time to set up Chat Up Fines, a campaign against online harassment, with her colleague Richard Pryor.

“Now, everyone’s worried about this massive