Evaluation of the Business Gateway Fife Start-Up Service

An evaluation was undertaken of the Business Gateway Fife Start-Up Service, which supports business start-ups in the area. The aim was to find out: how many new jobs had been created; the cost per gross and additional new start; the cost per gross and additional job generated by new start; and the survival and failure rate, with reasons for failure.

Telephone interviews were undertaken with a large number of start-up businesses. Interviews were also undertaken with: Business Gateway Fife Start-Up advisers; some businesses no longer trading, to establish the reason and current circumstances; banks and accountants in Fife, to establish the extent of start-up activity outwith the Business Gateway support network; and two other LECs with output-related contracts.

Over 1,800 businesses were supported by Business Gateway Fife over the study period (2001-2004), and it was estimated that around 1,460 were still in existence at the time of the study. The average turnover was £63,000 per business with two jobs per business. Surviving businesses showed a reasonable propensity to grow. The number of start-ups in Fife was found to be growing steadily, with particularly good growth in the North East. The number of people under the age of thirty starting businesses was growing, while the number of women starting businesses had declined slightly. The motivations and origins of start-ups were found to have changed somewhat from ten years previously. Lack of finance, risk and lack of confidence remained the biggest barriers to start-ups. Many businesses which had ceased trading did so for positive reasons, and most entrepreneurs had had a positive experience of starting a new business. The majority of clients were positive about the Start-Up Service. The marketing of the service was the least positive aspect identified by clients, and some felt that more aftercare would have been helpful. New turnover in the Fife economy was estimated at between £16m and £21m, with between 690 and 920 jobs created. Business Gateway Fife was found to have made a significant contribution to the development of the small business economy in Fife, at a reasonable cost.

Little evidence was found to support the need for a radical overhaul of the service. However, some recommendations were made: marketing strategies should be focused on women, younger people and those from disadvantaged backgrounds; links with banks to provide start-up finance should be strengthened, to reassure clients; more specialist services should be developed for young entrepreneurs; aftercare provision should be promoted and funding options for it explored; higher-growth businesses should be targeted and enhanced support given to them; and more robust data on business survival rates should be developed.