More stoppers and fewer starters again

Q2 2024: starters, stoppers and bankruptcies

The number of starters stood at 61,864 in the second quarter of this year, down 9.2% from the same quarter last year, when there were 68,161. Conversely, the number of stoppers increased by 12% (33,136 in Q2 2024) and the number of bankruptcies rose by 15% (929 in Q2 2024).

A total of 2,554,436 establishments were registered in the KVK Business Register at the end of Q2. On balance, the number of establishments is still increasing; there was a 2.7% increase this quarter compared to the same quarter last year.

Fewer starters, more stoppers

Entrepreneur advisers at KVK identify several trends causing reluctance to start up. "We notice that going into paid employment is being found more attractive again. One reason for this is that collective labour agreements (CAOs) have become more attractive in recent years. Also, many (young) people are choosing employment to have more security to build a livelihood," said Paul van Eijck of KVK. The Verduidelijking Arbeidsrelaties (Vbar) Act and the Netherlands Tax Administration's forthcoming stricter enforcement also seem to play a role in the decline in start-ups.

KVK also sees a number of issues recurring frequently in the increase in stoppers. "SME owners are struggling with staff shortages, making it difficult to keep their business running. We also increasingly hear that businesses looking for a successor cannot find one, and problematic debts play a role."

"There has been a lot of coverage in the media about increases in salaries in various sectors, which may have drawn potential start-ups to salaried jobs. Added to this this week was the news from the Netherlands Tax Administration that they are lifting the so-called enforcement moratorium by 1 January at the latest, which means they will start checking again for false self-employment. This could mean that we will continue to see a decline in the growth of start-ups over the coming quarters. In addition, there could be a saturation of the number of entrepreneurs in certain sectors," said Josette Dijkhuizen, entrepreneur and Tilburg University associate professor.

Construction sector and courier industry

In almost all sectors, a decline in the number of start-ups per 1,000 establishments can be observed. The construction sector showed the sharpest decline, with 19%, whereas in August last year there was still growth in the number of start-ups (4%). With an increase of 22%, the rise in the number of quitters in this sector was also relatively high.

A large decline can be seen within the 'electronic building installation' branch. Here, the number of starters decreased by 45%, while the number of stoppers increased by the same percentage. 'Laying of electricity and telecommunications cables' also declined significantly with a more than doubling (+53%) of the number of stoppers.

 

Notable is the rise in the number of quitters in the courier industry. "One explanation for this may be the Supreme Court's notorious 2023 ruling, which established that Deliveroo delivery drivers were not self-employed but actually had an employment agreement. This put many delivery services on edge. In addition, this sector has been in the news very negatively and entrepreneurs in this sector may have switched to salaried employment or as entrepreneurs in another sector," Josette Dijkhuizen explains.

Download the entire KVK Trend Report Q2 2024 (in Dutch).