More entrepreneurs quitting, fewer starting new businesses

The number of entrepreneurs starting a new business decreased by 8 percent last month compared to a year earlier, the Chamber of Commerce reported. The number of entrepreneurs who closed their business increased, also by 8 percent.

The number of startups was still much higher than the number of quitters, so the total number of companies in the Netherlands increased. The country counted 2.2 million businesses at the beginning of April, 6 percent more than on 1 April 2021. 

According to Joris Knoben, professor of business economics at Radboud University, the figures indicate that the business sector has reached a tipping point now that the government has stopped its coronavirus support measures. "Many entrepreneurs are still struggling with the financial consequences of the pandemic. At the same time, energy costs and inflation are sky-high. Therefore, it is no great surprise that the number of quitters and bankruptcies is increasing."

In March, private security was a popular sector with nearly double the number of startups than a year earlier. In the retail sector, the number of startups fell by 44 percent. That mainly indicates that the rapid growth from the coronavirus crisis has disappeared. On balance, the number of entrepreneurs in that sector remained about the same.

Online startups have also been popular for the past two years. Knoben expects that there will be quite a few quitters in this sector. "With the reopening of the economy and the return to the office, online shops have fewer market opportunities. So many have started in the past two years that you actually expect a 'shake-out' with quite a few quitters." He said that the low costs of keeping an online store running are likely why that trend is not yet visible.

Bankruptcies rose again after a dip during the lockdown in January. Especially in the west of the country, there was an increase in bankrupt companies.