KVK: highest number of bankruptcies since October 2020; many security startups, decrease call centres

The number of bankruptcies of economically active enterprises in September is considerably higher than the monthly average as of January 2021. That average stands at 132, while last month 176 enterprises went bankrupt; the highest number since October 2020 (192). This is according to the KVK Business Trend Report for September 2022.

KVK asked Prof. Dr. Joris Knoben, Professor of Strategy and Entrepreneurship at the Tilburg School of Economics and Management, to interpret the figures from the Trend Report. Knoben: “Although the number of bankruptcies is relatively low in absolute terms, it is an important indicator of (financial) problems in business. So, that the number of bankruptcies has been higher for several months in a row than in the same month last year is a negative sign. It shows that the accumulation of problems, such as coronavirus and the cost crisis, is becoming too much for more and more companies.”

As of 1 October 2022, there were 2,294,255 economically active companies registered in the Business Register. Compared to a year ago, 150,555 businesses were added, which is an increase of 6.6%.

Startups and closed businesses

In September 2022, 21,841 new businesses started up. This is a modest increase of 856 (4.1%) compared to September 2021. The number of startups has been increasing for years. The average number of startups in the first 9 months of 2020 was 19,118 per month. The following year there were 20,934 per month in the same period. This year, it averaged 21,685 monthly. So, the month of September 2022 was closest to the latter.

There are also slightly more quitters than last year. Last month, 9,706 businesses were closed, which is 259 more than in September 2021 (2.7%). There were more quitters in 2020, averaging 13,058 per month over the first 9 months. In 2021, that dropped to an average of 10,147 per month. This year, the number of businesses closing is slightly increasing again and so far averages 11,058 per month in the period of January-September.

“The number of startups and businesses closing is surprisingly stable,” Knoben observes. “An important note is that these trends are dominated by self-employed professionals starting or closing down. Among SMEs, the situation is less promising and we see a clear decrease in the number of starters and an increase in the number of businesses that close down. Just like the number of bankruptcies, this is also a sign of increasing problems among SMEs.”

Industry: increase in startups in the repair and installation sector

In the stable business sector of industry, the branch 'repair and installation of machinery' stands out. Within the sector of industry, this has the highest number of startups in September 2022, namely 8.8 per 1,000 companies.

“Industry is a sector with relatively little business dynamism. The sector is characterised by a limited number of large companies," Knoben points out. “Because of the low dynamism, industry does not easily stand out as a sector. The increase in the number of startups in the repair and installation sector is mainly due to self-employed professionals who maintain and repair engines and installations.”

Business services: fewer call centre startups, more security guards

In contrast to the industry sector, the business services sector actually covers a large number of small companies. The private security branch is the absolute leader with the high number of 40 startups per 1,000 companies in September 2022.

“In private security, too, most startups are self-employed professionals,” Knoben says. “Just like other sectors, such as hospitality and childcare, working as a zzp’er is an attractive option for security professionals. Partly because of changing requirements, such as fire watch and mandatory supervision on construction sites, there are many opportunities in this industry.”

In call centres, a sharp drop in the number of startups is visible in May 2021. This continues after that, although less severely. Fewer companies were also registered in absolute terms under the call centre heading; 1,407 in May 2021 and now only 1,271. What is striking is the gradual decline in the number of collection agency startups. In recent months, not a single collection agency has even been started.

Knoben: "The decline in the number of call centres could be partly due to stricter telecommunications laws. In addition, the importance of telephone contact is decreasing due to the rise of other ways to communicate with customers, such as chatbots.”

KVK Trend Report for the Business Sector

The KVK Trend Report for the Business Sector (‘Trendrapport Bedrijfsleven’) shows the trends in business dynamics over 12 months. The Trend Report looks at business startups and closed businesses, as well as specifically at bankruptcies. Trends are depicted both for industry sectors and regionally. In this Trend Report, the figures for September 2022 are compared to the same month in 2021. In addition to the trends, it identifies the industries that stood out in the last month due to the highest number of startups and closed businesses.

KVK Business Trend Report September 2022 (in Dutch)