Why is 2022 the year to start a business?

Let’s be honest with ourselves: in recent times, there hasn’t been a huge amount of positivity around business prospects, whether here in the UK or in most other countries. And with the emergence of the much-talked-about Omicron variant of the COVID-19 virus, many people are asking whether we could soon be reversing to much bleaker conditions for ‘UK plc’.

Well, here at Practical CFO, we’re here to tell you that 2022 could be very far from a bad time to start a business. In fact, it could be an excellent time to set up a business, at a time when so many others might be hesitating.

Here are just some of the reasons why we are so convinced of this.

Entrepreneurs themselves are predicting strong business growth

For all the ‘doom and gloom’ in certain parts of the media, it’s notable that business owners themselves are still pretty optimistic about how the economic landscape of 2022 will shape up.

This much was clear from research reported on by Business Leader, which found that 58% of UK entrepreneurs anticipated higher turnover during the coming year. The regional breakdown showed that business owners in the South West were most optimistic, with 72% expecting greater turnover, compared to 67% of respondents in London and 66% of the South East’s entrepreneurs.

And what about that northern “levelling up” agenda promised by the UK Government? Well, even 55% of business owners in the North West expect their turnover to increase in the months ahead.

It was also revealed by the research that over half (55%) of businesses expect to spend the next year recruiting more staff, and that even in the wake of the challenges of the past two years, 66% of founders would still recommend starting a business to others. A mere 11% of those quizzed in the UK said that they would not recommend starting a business to someone else.

The IMF has predicted sturdy global economic growth

Writing for The Times, British businessman Sir Martin Sorrell – distinguished for being the founder of one of the world’s largest advertising companies – recently declared that “the overall prospect looks very good in the year ahead, notwithstanding the many challenges that we are facing.”

He was referencing the International Monetary Fund (IMF)’s World Economic Outlook for October 2021, which projected that the global economy would see 5.9% growth in 2021, followed by a 4.9% rise in 2022.

While the IMF was cautious in its words – saying that “rapid spread of [the] Delta [variant of COVID-19] and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome” – Sir Martin sounded a more positive note.

He pointed out that if both those predicted percentages did bear out in reality, “you would have to go back half a century, to 1972-73 and the impending oil crisis in fact, to find two consecutive years of such strong economic growth.”

There have been suggestions of a rebound in business investment

Another encouraging development for the year ahead was reported on by the Financial Times, which observed that “UK business investment is expected to rebound strongly in 2022 because of a generous government tax incentive and the need to upgrade assets that have been neglected as a result of uncertainties related to Brexit and the pandemic.”

The newspaper quoted economist Thomas Pugh as claiming that business investment would be a “major growth driver” during 2022. He explained that companies were now holding £140 billion more cash than prior to the pandemic, and that as a consequence of the lockdowns, it was likely that a significant backlog of projects had accumulated.

This combination of factors, he said, meant that such firms were “in a good position to invest”.

The remote working revolution could enable you to access new talent pools

The practice of working from home was not, of course, invented during the coronavirus crisis. However, the pandemic has undoubtedly had the effect of accelerating what was likely to eventually come to pass regardless: its widespread popularisation.

Even with the lifting of lockdown conditions, many employees have continued to favour working from home. But this could also bring a certain advantage to business owners in 2022, with many already taking the chance to access new employees with skills that they might not have been able to easily find among candidates in their local area.

Would you like to benefit from the highest standard of business support and advice as you negotiate your own firm through the challenges and opportunities that await you over the coming 12 months? If so, please do not hesitate to reach out to the PCFO team, by calling +44 (0)800 048 9413.

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