Local Economic Impact 2006/07
Job creation/ business formation impact within Birmingham
Companies
No of Limited Companies created in 2006/7 (Companies House Figs) = 390
Sole Traders started up & evidenced = 415
Verified Companies formed = 805
Jobs
New jobs total for Ltd Companies only = 867
A new Ltd company produces 2.6 – 2.9 jobs in local economy (SBS fig) = 1131
Assuming 1 job produced by each sole trader plus owner = 830
Total Jobs created 2828
Salaries
1998 Limited Company Jobs Input a wage bill of:
Average wage is £23,000 per annum = £45,954,000
Assuming real range is mid at £15,000 = £29,970,000
Or minimum wage level at £10,000 = £19,980.000
830 jobs created via 415 sole traders at (£10,000) (SBS) = £8,300,000
TOTAL jobs income generated ranges from £28.28m to £54.254m
depending on what income assumption is made.
Company Turnover
Turnover income generated through 390 new ltd companies = £19,500,000
Assumes 51% of average turnover in Birmingham from SME’s with average new limited company generating £50,000 turnover in first year. (Treasury Figs) (High Growth do £200,000 average)
Sole traders start-ups are assumed to do £15,000 turnover per annum = £6,225,000
Combined turnover total = £25,725,000
Economic Value
Taking the lowest assumptions for turnover/wages/jobs in Birmingham, BI start up services generated for the local economy a total of £54.28m
and for upper level assumption would be £79.98m
These figures are verifiable company formation counts, using national calculations (SBS, ONS and the Treasury model.) Until new limited companies/sole traders are two years old we have no accounts to check their true value/workforce numbers.
However taking the minimum figures of a wage at £10,000 and counting the lowest average turnover including a 50% reduction to allow for start-up status, Business Insight generated into the local economy, a minimum of £54.28m for a cost of £704,225 (overheads/salaries/resources).
A Return of £77 for every £1 invested in Business Insight by BCC.