“Plan B Entrepreneurship” Is On The Rise In The UK: What Does This Mean For The Startup Scene?

On paper, an increasing number of Britons are starting their own businesses – sounds promising, right?

Well, yes and no. From the outset, it certainly sounds like a good thing, and we’re not about to say it’s bad. However, what makes things more complicated is the why. Indeed, the motivation behind this trend is shifting, and it’s not necessarily the positive news we think it is.

Increasingly, entrepreneurship isn’t about chasing a dream or creating the next big innovation. Instead, according to a report recently published by BusinessForSale.com, many are launching businesses as a “Plan B” – a safety net in case traditional employment disappears. In fact, over the past year, UK business registrations rose by 3.5%, bringing the total number of private sector businesses to 5.7 million, with 191,000 new businesses launched in just 12 months. Since 2010, the total has grown by 27%.

Andrew Markou, Co-owner and CEO of BusinessesForSale.com, has observed this trend first-hand. BusinessesForSale.com is the UK arm of a global online marketplace that connects business buyers and sellers, with listings across more than 130 countries.

“We’re seeing a fundamental change in why people start businesses,” Markou explains. “Traditionally, entrepreneurship was driven by opportunity and passion. Now, we’re increasingly working with individuals who are starting businesses out of necessity because traditional employment feels less reliable than it used to.”

Why Are More Brits Starting Businesses?

Several economic and technological factors are driving this shift, it seems. Job insecurity has become a pressing concern. By mid-2025, the UK unemployment rate had risen to 4.7%, up from around 3.8% in early 2024. Even modest increases in unemployment can prompt workers to consider self-employment as an alternative – after all, unemployment, even the prospect of it, is enough to get people moving and shaking.

Redundancies are climbing, while vacancies are shrinking. So, basically, these fears aren’t unfounded, by any means.

Between September and November 2025, total estimated vacancies fell by 77,000 – a 9.6% drop from the previous year – affecting 16 of 18 industry sectors. Fewer available roles mean that losing a job can be particularly risky, making entrepreneurship more appealing.

The rise of AI is also reshaping the labour market. A survey of UK employers found that one in six expects to reduce staff numbers within the next 12 months due to AI adoption. Workers in affected sectors are understandably worried about whether their roles will exist in the coming years, which adds to the allure of Plan B entrepreneurship. Everybody wants a backup plan, after all.

The Risks of “Plan B” Entrepreneurship

While starting a business as a safety net may seem like a smart move, Markou warns that it actually carries distinct challenges.

Under-capitalisation is common. People often underestimate how much money a business needs to survive the first 12 to 18 months. “Someone loses their job or feels threatened by redundancy, and they rush into starting a business with whatever savings they have. But most businesses take time to become profitable, and if you haven’t budgeted for that runway, you’re setting yourself up for failure,” Markou says.

Burnout is another concern. Running a business while worried about finances creates immense pressure. Unlike passion-driven entrepreneurs, those starting out of necessity often don’t have the luxury of time to grow their business gradually, and the stress can lead to early collapse. Unrealistic timelines also plague Plan B entrepreneurs, as many expect immediate results and struggle to maintain patience.

What Can Plan B Entrepreneurs Do To Improve Their Odds?

Despite the challenges, necessity-driven entrepreneurship can succeed with careful planning.

One strategy is to buy an existing business rather than starting from scratch. “You’re acquiring something with established customers, proven revenue streams and existing systems, which dramatically reduces risk compared to launching something brand new,” Markou notes.

Due diligence is critical.

Reviewing multiple years of accounts, understanding why the owner is selling and verifying all information independently can prevent costly mistakes.

Of course, financial planning is also essential. Markou recommends having at least 12 months of living expenses saved, plus additional working capital for the business. Testing ideas on a small scale while still employed can help validate concepts and generate early revenue without threatening financial stability.

Seeking professional advice can make a substantial difference. Accountants, business advisors and mentors can help new entrepreneurs avoid common pitfalls and accelerate learning. “Good advice pays for itself many times over,” Markou warns.

Do These Plan B Startups Stand a Chance?

Plan B entrepreneurship reflects broader economic and social pressures in the UK. While it comes with unique risks, it also demonstrates the adaptability and resilience of the workforce.

With careful planning, realistic expectations and the right support, these businesses have the potential to not only survive but thrive, turning necessity into opportunity.

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