Research from business software provider Sage UK reveals that one in five people planning on starting a business will open up a physical shop in the next two years.

The Entrepreneurial Britain study of 3,320 people explores respondents’ plans on setting up a business, where these businesses will be and in what sectors, with retail proving the most popular.

High street shop closures have impacted town and cities across the UK. In 2011 the problem reached its peak with 14 shops closing every day, with many high streets yet to recover.

However, just under half of all entrepreneurs (47 per cent) plan on starting a business in a shop or office.

Lee Perkins, managing director for Sage’s small business division says, ‘Despite the success of firms like Amazon and Facebook, it’s fascinating to see that the next generation of entrepreneurs are still drawn to bricks as much as clicks when it comes to setting up a business.

‘Everyone has business potential and it is encouraging to see so many people set to launch a new venture in the next couple of years. Whether it’s the Mary Portas effect or not, without doubt, there is hope for the UK high street.’

More than half of all 18-24 year olds (52 per cent) that are planning on starting their business are aiming to do so in a bricks-and-mortar shop.  

Studies on shop closures have shown that the North East of England is the area hardest hit, with 15 per cent of retailers closing. However, Sage’s research suggests that things are looking up for the region, as it had the highest number of people planning on starting a business compared with the rest of the UK with retail being the most popular sector (22 per cent).

Business confidence stronger for online companies than high street operators

Online retailers are more optimistic than the high street about the business landscape over the next 12 months, finds research.

According to a survey of UK small and medum-sized enterprises (SMEs) by web hosting specialist 34SP.com, more than three quarters (78 per cent) of online retailers say they are confident that sales activity will rise over the next year, compared to just over a quarter (27 per cent) of high street businesses.

Both online-only and bricks and mortar businesses were asked what they thought of the current state of the UK economy. Four in ten bricks and mortar companies say they feel the current state of the economy is ‘bad’ compared to just under a third (32 per cent) of e-commerce businesses.

Only 19 per cent of high street businesses and 17 per cent of online-only businesses say they think the current state of the economy is ‘good’, according to the poll of 1,000 SMEs.

Asked to predict how the economic landscape would look in 12 months’ time, both virtual retailers and high street businesses say the economy would be in a healthier state, but online-only businesses are more confident this would feed through to more business activity.

Four in ten (41 per cent) e-commerce businesses predict that the economy would be much healthier in a year’s time, compared to 36 per cent of bricks and mortar businesses.

Daniel Foster, founder and technical director of 34SP.com says that online retailers feel much better placed to take advantage of an improving economic climate.

‘Although both e-commerce and high street businesses expect to see a significant improvement in the state of the UK economy over the next 12 months, online retailers feel more confident that this will feed through to stronger business performance,’ he adds.

‘This will inevitably be due in part to the extra costs that bricks and mortar businesses have to meet, but also because of the noticeable shift in the numbers of people choosing to shop online rather than visit the UK high streets.’