Small businesses form the beating heart of the UK economy. The latest official government data shows an astonishing 99.8% of all UK businesses are small and medium-sized enterprises (SMEs), from sole traders to micro-companies with a handful of employees.
Whether you’re in construction, tech, or retail, small enterprises power every industry sector.
Here we drill down into the data to learn more about the UK’s small businesses.
How many small businesses are there?
According to the data, the total number of businesses has increased from 4.5 million to 5.5 million today.
99.8% of them are small and medium sized enterprises (SMEs).
There are 3.1m sole traders, 2.1 active limited companies and 356,000 standard partnerships.
The peak reached 6 million, just before the pandemic outbreak, and the UK’s departure from the EU.
There are almost 1.2m ‘micro’ businesses (with 1 to 9 employees).
Compare these numbers with the mere 8,000 large businesses employing at least 250 people each.
How many one-man bands are there?
Of the 5.5 million total, the vast majority – just over 4 million – are one-man bands. These businesses don’t employ anyone other than their owners.
This 4 million number is made up of 2.9 million sole traders, 920,000 limited companies, and 270,000 partnerships.
Do small business numbers vary between regions?
At the start of 2024, the south of the country had the highest percentage of small businesses per adult population.
London has 1,370 businesses per 10,000 adults, followed by 1,188 in the South East and 1,113 in the South West.
Scotland’s business density level is 770, slightly higher than the North East (751 per 10,000 adults).
Which industries have the most small businesses?
There are small businesses working in every industry sector, but some sectors are a natural fit for the UK’s SMEs – particularly building, IT and trade and repair.
The construction industry accounts for almost 900,000 SMEs – 16% of the total.
This is followed by Professional, scientific, and Technical Activities (14%) and Wholesale and Retail Trade and Repair sectors (10%).
Compare these numbers with the 3,000 SMEs that work in the Mining, Quarrying, and Utilities sector—less than 1% of the total.
What about employment and turnover?
Employment: SMEs employ 16.6 million people, accounting for 60% of total private sector employment. Small businesses (those with 0-49 employees) are the most common, employing 13 million people.
Turnover: SMEs generate £2.8 trillion per year, which represents 52% of the total turnover for the UK private sector!
What does this data reveal about the UK’s small businesses?
This latest report shows, more than anything, how vast the country’s SME sector is and how vital it is to UK PLC. Despite a small decline in numbers post-COVID, the current small business population remains stable, underscoring its resilience.
Unfortunately, small business owners – like many others – face the combined threats of inflation, higher taxes, and increased regulations. Their role in driving innovation and employment is undeniable.
Will Chancellor Rachel Reeves reward small business owners for their incredible contribution to the UK’s economy in her Budget on 30th October 2024?
