More than 38,000 new businesses were set up in Scotland last year, according to new research from R3, the UK’s insolvency and restructuring trade body.

R3’s analysis of data provided by Creditsafe shows 38,313 firms were set-up in Scotland in 2023 – a rise of 12.1% from 2022’s total of 34,168.

Richard Bathgate, chair of R3 in Scotland, said: “Amidst tough economic challenges including high inflation and the resultant rapid rise in interest rates and supply chain issues, tens of thousands of Scottish entrepreneurs embraced the opportunity to launch new businesses last year.

“Many of these new ventures are micro and small businesses but will play a crucial role in supporting the growth of the Scottish economy in the year ahead.”

The highest monthly number of Scottish start-ups for 2023 was recorded in March, when 3,798 new firms were launched.

That was an increase of 8.7% on March of 2022, which was also the most busiest month for start-ups in that year.

However, R3 said that despite these positive figures, Scottish firms still face significant challenges over the next year, with many predicting that economic growth in Scotland is expected to be subdued in 2024.

Bathgate, a restructuring partner at Johnston Carmichael, said: “Setting up a new business is just the first step – directors need to stay alert to any signs of financial distress and act accordingly should they arise.

“Problems paying the bills or staff on time, stock levels piling up and falling revenue are all early indicators a business could be in trouble, and at that point it’s essential to seek advice from a qualified source, whether you’re running a start-up or a more established business.

“Many R3 members in Scotland are happy to provide a free initial consultation to listen to your concerns and help you understand the options for resolving them.”