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Business management

Generation Covid: new report looks at how start-ups have coped

We’ve partnered with the CBI to research how new businesses have survived the pandemic. Here are our main findings.

With such an entrepreneurial groundswell in the UK to both nurture and learn from, our report, produced with CBI Economics, the economic consultancy of the Confederation of British Industry, highlights this inspirational set of businesses. As well as showcasing their resilience, ‘Generation Covid: How the pandemic has shaped the start-up landscape’ seeks to understand the further support and help they deserve, including finance and further advice.

Its main findings are:

  1. Growing businesses need access to the right kind of financing, and what is right for one start-up may not necessarily be right for the next. Many founders expect larger banks to be less agile and more onerous than smaller challengers.
  2. In many cases, founders were using their personal savings – or taking loans from family and friends – as a source of finance. This is known as bootstrapping, and 62% of start-ups did this during the pandemic.
  3. Start-ups are vital to the recovery of the UK economy, and they need continued collaborative working with all parts of the entrepreneurial ecosystem. Those entrepreneurs who secured more conventional funding also appreciated the advice and support they received.
  4. Pandemic-born businesses are more likely than their pre-pandemic counterparts to feel like a role model to other entrepreneurs, recognise the importance of adopting new technology, and understand the need to minimise their impact on the environment.
  5. Rising costs and regulatory uncertainty have intensified, meaning start-ups face risks without the proper support and the means to scale. Challenges distinct to pandemic-born start-ups also include more reliance on digital tools, such as online services, payments and cashless transactions, building networks remotely rather than face-to-face, and uncertainty over the duration of dampened economic demand.
Case study: The Book Shelf

In facing such obstacles, entrepreneurs have sought to both learn and innovate, but also not lose sight of the bigger picture. Take the example of The Book Shelf, which helps authors create books through editing, design, marketing and coaching. Founder Ameesha Smith-Green was initially working in the industry as a freelancer and at the start of 2020 began to build her work into a business. 

“Everything we do as a business is trying to encourage authors to be more sustainable. We encourage e-books and print-on-demand rather than book printing… We’re also working towards B Corp certification, and we’ve set up a partnership with the Rainforest Trust.” 

As a business banking customer, Ameesha received regular calls from her bank checking on her well-being and whether she needed any extra support. Our engagement meant she felt supported throughout the pandemic and as she reflected on the next steps for her business. 

Greater access to support for businesses

At a time when there has never been more support available in terms of access to grants and funding, networking, mentoring and angel investment, the report urges more entrepreneurs to start up a business.

Tony Danker, CBI Director General, says: “Pandemic-born businesses, start-ups created in 2020 onwards, will become case studies that MBA students study for years to come. These businesses, led by ambitious, resilient entrepreneurs, have innovated in so many ways, and at such speed, that they give me a great sense of optimism. It’s crucial we give these leaders the support they need to grow and succeed.” 

 

Read more on this report here.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

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