New business startups 'on rise'

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North East sees new business boom

Business advisors in the North East say they have seen "a substantial rise" in the number of new firms being set up.

Business Link North East says it has helped around 4,000 people set up on their own in the last year.

The organisation says it is confident the trend will help attract established firms to the region, although it says many of the new companies could fail.

The rise is being put down to a lack of confidence in traditional employment during the economic downturn.

Built on a culture of heavy industry, which saw generations of men working for the same company for life, the North East has traditionally seen relatively low levels of entrepreneurship.

Chris Simpson acknowledges many new firms could fail

But with the demise of the "job for life", the region's jobseekers are being encouraged to look at self-employment.

Business Link North East's account manager Chris Simpson acknowledges however that of the new businesses opening in the region, many are likely to fail.

But he also believes that among them are the entrepreneurs that will help drive the regional economy out of the recession and beyond.

"What we're looking to do as far as the North East is concerned - yes we're in an economic downturn at the moment - but is to really try and encourage businesses to both start up, and also businesses to move into the North East.

"So the North East is going to be the place to open a business and also to move your business to."

Katie Moulding has just opened a second-hand designer clothes shop on Teesside. The business relies on women selling off their old designer clothes via the shop and paying Katie a commission on every sale.

Getting into business

Ms Moulding says the recession could be an opportunity for those with the correct business model.

"I worked in a shop similar to this where I used to live and it was such a success over there and it was so successful with the economic situation at the moment, so that's what really pushed me into doing it," she said.

She admits, though, that optimism was not the only factor in her decision to start a business.

"I'd actually looked for jobs elsewhere and I'd struggled to find a job with a company, or something like that, so I decided to set up my own business and if I didn't do it now, I would never do it."