THREE businesses are now being started every hour of every working day in Edinburgh – the highest number since records began almost 150 years ago.
The figures for start-up companies have been hailed as another positive sign of recovery in the city’s economy.
They show that 2769 companies were formed in Edinburgh and the Lothians in the first six months of 2012, an increase of 18 per cent on last year. It represents the largest number for that period since 1865.
Business leaders today welcomed the news but also urged caution as many new companies struggle to survive their first three years.
Today’s figures also show a slight increase in local companies going out of business, leaving the city with a “net growth” of 1407 firms.
And they said many of the new companies formed may be one-person consultancy operations rather than employers.
However, company formation analyst Duport, which monitors business growth around the UK and produced the figures, said the picture for Edinburgh was looking “very positive”.
Duport managing director Peter Valaitis said: “It’s incredibly encouraging not just to see so many new companies being formed in Edinburgh, but also staying open.
“With the highest net growth of businesses on record, Edinburgh is looking set to develop and grow its economy despite the double-dip recession.”
The firm surveys companies registered in different parts of the UK through data from Companies House, the Office for National Statistics and Ordnance Survey.
Its new report shows the Capital also continued to increase its UK share of companies – in the first half of 2012, 1.1 per cent of all new UK company registrations were made in the Capital. This figure has been steadily increasing over the last five years from 0.8 per cent in the first half of 2008.
Mr Valaitis added: “There could be many reasons for the boom in new company registrations in Edinburgh.
“With a rise in unemployment, more people may be seeking empowerment through starting their own business. Also, growing use of the internet and new technologies is making the process of setting up your own company easier than ever before.”
City council leader Councillor Andrew Burns, who last week unveiled his administration’s five-year strategy towards economic growth, said the figures were welcome.
He said: “These figures show that despite challenging economic conditions, Edinburgh seems to be bucking the trend and is still a very attractive place to do business.
“Support for business helps create jobs and opportunities, particularly for our young people, and our five-year economic strategy launched only last week outlines our plans for the future and shows how we will do even more to ensure growth and employment opportunities in the capital.”
Council chiefs have set a target of 20,000 jobs to be created in the Capital by the public and private sectors over the next five years. Drawn up in the wake of the banking crisis, the council also said it was aiming for £1.3 billion of infrastructure investment and 10,000 people helped into work or learning between now and 2017.
Business leaders point out the Capital’s survival rates for starts-ups show that while 5.5 per cent fold within the first year, the figure jumps to 16.9 per cent in the second and 14 per cent in the third.
Graeme Birse, of the Edinburgh Chamber of Commerce, said: “Yes, the first year is tough but the second year is even tougher again.
“There is, however, an underlying durability and confidence in Edinburgh that give us good reason to hold our nerve.”
Duport’s data points to a large number of companies being formed in the consultancy and management sectors in Edinburgh.
Figures also a big rise in IT firms and software development companies.
Other sectors such as take-aways and mobile food stands and restaurants also featured in the report.
The Companies House figures, which date to 1865, also reveal a startling snapshot of the cities economic standing over the preceding decades with spikes in the number of Capital firms witnessed following the end of the Second World War in 1945 and during the Thatcherite boom of the mid to late 80s.
Numbers also multiply rapidly in the technological boom of the late 90s and early 2000s.
Case study: ‘I’m not going to lie and say it’s easy... it’s tough’
DSB Furniture Ltd was set up in March of this year by David Bissett, from Corstorphine.
The company specialises in providing furniture to commercial businesses, and David – who has 20 years of experience in the industry – supplies everything from a single desk and office chair to a complete furniture scheme for a bar, bistro or hotel.
He said: “I worked for various companies but towards the end of last year I decided I’d like to chance being my own boss. I’m not going to lie and say it’s easy because it has been tough, but there is definitely a market, as shown by the number of new registered companies.”
Business has been a bit feast-or-famine but David was prepared for that.
“People will always spend money on things they need. In tough times they just spend more wisely, as a business the key is to be priced correctly,” he said.
“I’ve greatly enjoyed being my own boss. As these figures no doubt include, Edinburgh sees a lot of new bistros, bars and restaurants opening each year, so I’m optimistic.”
He added: “My plan is to slowly grow the business. I’ve a lot of ideas to help this. I’m looking to embark upon stocking my own range of products and I’m also in talks with a business down in Brighton about the possibility of importing furniture and products from China.
“I’m also working with a manufacturer based in Lancashire who offers a wide choice of expertly crafted traditional and modern leather furniture.
“The company ethos is based on placing an equal level of importance on suppliers, staff and customers alike.
“No matter how small or large the project, we approach it with the same level of dedication.”
Case study: ‘I like to think I offer a good-quality reliable service’
EMILY Hogarth is a designer and illustrator who set up her own business in March.
The 27-year-old former Edinburgh College of Art student has worked freelance and on a commission basis since 2008.
However, demand for her work has now grown to such an extent that she has taken on an assistant two days a week at her New Town studio.
Most recently, her designs have been seen on the Cadbury’s Flake ‘Allure’ packaging as well as the Nivea Pearl and Beauty global campaign.
She has also taken on another member of staff, such is her success.
She said: “The business has really grown organically over the years.
“Since finishing my Masters I’ve worked as an illustrator and surface designer.
“I’ve built up my customer base over these years, so much so that this
year I decided to take somebody on and register as a business.
“A lot of my work comes from return orders.
“I like to think I offer a good-quality reliable service.
“It has been a lot of hard work and determination though.
“I thought long and hard before taking on extra staff earlier this year.
“It has started to pay off
in that I can accept more work but I’m still wary of attempting to run before I can walk.”
Emily’s creations can be stand-alone pieces of art or translated onto things like screen prints, fabric designs and stationery.
Emily added: “My client list isn’t so much local but worldwide. I take commissions from all
“There’s a delicate balance to be found between growing the company and retaining what makes it work.”