PeoplePerHour.com • the website that connects small businesses with remote freelancers • reports 15% increase in budgets since March and shift towards business development over cost-saving, as increasing body of evidence points to green shoots of economic recovery.
According to research published this month by the British Bankers’ Association, start-up and small business activity is increasing in the UK. Compared to February, in March the level of high street banks’ lending to small businesses rose by £271m and deposits from small businesses increased by £881m.
Dr Richard Roberts, Barclays Bank’s Head of Research, admitted earlier this year that UK start-up activity had confounded expectations: “So far we have not seen the contraction in start-up activity we would expect given the scale of economic slowdown.”
Dr Roberts’ colleague Julian Frankish added: “Given the experience in 1990 and 1991 where start-ups did fall quickly, it's a little surprising that there's not been more tailing off in activity.”
No economist has provided a definitive explanation for this difference between this recession and the last, but many commentators are speculating that it is due to the advent of new technologies • particularly the internet.
PeoplePerHour.com • an online marketplace for businesses to buy and sell services • is one example of how the internet has made starting a business easier, and running a business cheaper. Since launching in January 2008, the site has grown rapidly and now has 30,000 registered users.
“From an entrepreneur’s perspective, the key difference between this downturn and any previous recession is the emergence and prevalence of new technology that is proving a lifeline for thousands of small businesses across the country,” says PeoplePerHour.com founder Xenios Thrasyvoulou.
“You don’t need huge amounts of capital or time to start a business in 2009,” continues Thrasyvoulou. “On our site for example, you can start selling services to businesses immediately. You can also find help with every aspect of building a business • from legal advice to marketing and sales • cheaply, quickly and all from your desk. In 1991 that simply wasn’t possible because the technology wasn’t there.”
Many entrepreneurs are using the internet to start-up new businesses on a shoestring. For example, Tom Nicholson recently launched his guaranteed rental scheme business Fixed Rent and sourced wide range of suppliers through PeoplePerHour.com to rapidly turn an idea into a going concern.
“I can’t imagine starting a business without the internet,” says Mr Nicholson. “In the current economic climate, the ability to find experts online quickly and cheaply has been pivotal to my business’s early success.”
It isn’t only start-up businesses that are effectively harnessing modern technologies. Established businesses are making dramatic cost savings by reverting to a virtual’ business model.
For instance, until 2006 telemarketing consultancy Answers and Solutions had ten fulltime employees and a Maidstone office. The company’s founder Richard Romain realised the internet enabled him to operate the business virtually • employing remote freelancers sourced through PeoplePerHour.com and operating entirely online. Overheads have been cut by £80k per annum.
“Small business owners are constantly advised to keep costs to a minimum in times of economic downturn,” says Mr Romain. “The advent of the internet makes this painful process so much easier than in any previous recession.”
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Sami McCabe
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PeoplePerHour.com Background Information
PeoplePerHour.com was founded in 2007 by two Cambridge University graduates: Xenios Thrasyvoulou and Simos Kitiris.
The company is funded by its founders and a group of prominent angel investors who are active in the internet space.
Typical PeoplePerHour.com buyers run a small businesses (usually less than 20 people) including boutique financial firms, internet companies, property and PR agencies amongst many others.
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