In almost any country small businesses are the backbone of the economy. They are an important part of the business landscape and crucial to the existence of the middle class in society.
How many small businesses are in the United Kingdom? What is their average turnover? What are the most popular sectors? Answers to these and many other questions can be found in our analysis of the UK small business market.
In this article, we have collected interesting statistics and facts that demonstrate the importance of this class of entrepreneurs.
99% of businesses in the UK are SMEs
Did you know that 99 percent of businesses in the UK are SMEs? They bring jobs, wealth and tax income to the country.
According to the Business population estimates for the UK and regions 2023, there are 5.51 million SMEs, which make up 99.9% of UK private sector businesses.
Average turnover of micro and small businesses
Micro businesses with 1-9 employees reported an average turnover of £446,872 per year, while small companies with 10 or more employees reported an average turnover of £2,802,670 in 2022.
53% of UK business turnover is generated by SMEs
SMEs account for over half (53%) of UK business turnover and three fifths (61%) of private sector employment.
Small business number is growing
The growth in the UK’s small business population has been driven by a 68% increase in very small businesses with no employees.
Micro-business survival rate
According to the UK government, micro-businesses with fewer than 9 employees closed at the highest rate – 11.3%. Larger small businesses have a better survival rate, with only 3.4% closing annually.
SME employers cited market competition (46%), red tape (43%) and taxation (40%) as the main barriers to growth.
How many SMEs in the UK?
The number of UK SMEs was highest at the beginning of 2020:
UK SMEs by regions
London is the region with the most SMEs in the UK.
20% of SMEs choose to work remotely
By the end of May 2024, about one in five (19%) companies said they either use or intend to use increased home work as a permanent business model in the future.
Business Insights and Conditions Survey (BICS) Team
Business Openings vs Business Closures
During these 2 years, 94,985 more businesses closed than were created. New business openings remained relatively low in the third quarter of 2023, but there were nearly 10,000 more openings than closings during this period.
Gender distribution in business management
According to Forbes, 24% of SMEs in the UK are defined as “equally run”, with an equal number of men and women on the management team.
Business numbers per capita in the UK
There were 1.0 million businesses in London in January 2023, equal to 1,477 businesses per 10,000 resident adults. — Parliament.uk
How many businesses are led by women?
According to the 2023 Rose Review Progress Report, just over 20 percent of all new businesses were led by women in 2022, up from 17 percent in 2018. — NatWest
UK Business birth rates by regions
In 2022, London, the North East, and Wales and Northern Ireland were the only regions to have more business births than business deaths.
SMEs raised £4.6 billion in 2023
In the first half of 2023, the total amount of capital raised by small business owners was £4.6 billion, a sharp 70% drop from the £15.3 billion raised in the same period in 2022. — Startups.co.uk
24% of SMEs nervous about the future
UK businesses and entrepreneurs are feeling nervous about the future, according to the Startups.co.uk survey, which revealed that 24% of respondents see economic instability as their biggest concern.
The most common legal form of SMEs
There are three main legal forms of businesses in the private sector; sole proprietorships, ordinary partnerships, and companies. Sole proprietorships are the most common legal form:
Number of SMEs per economic sector
The number of businesses considered to be SMEs active in each sector of the UK economy:
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