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November 7th 2019

Government stats demonstrate why small businesses are so important

As the General Election approaches, political parties of all hues will do well to remember the importance of small businesses to the UK, as highlighted by statistics recently published by the Department for Business, Energy and Induitrial Strategy (DBEIS).

Those statistics reveal that, at the start of 2019 there were 5.8 million small businesses in the UK (defined as those having 0-49 employees). The private sector business population has grown by 3.5% compared with 2018; not bad against a background of weak economic growth, although it must be said that most of the growth seems to relate to micro-businesses that employed no staff.

At the turn of the century, there were “only” 3.5 million private sector businesses in the UK, comparing that to today's position demonstrates the growth in importance to UK PLC of the private sector.

Approximately 76% of small businesses employ no one (apart from the owner), which means that about 1.4 million small businesses employ people, helping to sustain whole families and communities, too. About 2.6 million small businesses are registered for PAYE or VAT, further contributing to the Treasury’s coffers.

On a regional basis, at the start of 2019 there were 5.2 million small businesses in England (2 million of which were in London or the South East); 334,000 in Scotland; 222,000 in Wales; and 124,000 in Northern Ireland. Scotland has a relatively low density of private sector businesses compared to most other parts of the UK, with 739 businesses per 10,000 resident adults, lower than Wales, Northern Ireland, and most regions in England.

Of the entire UK business community (including large businesses – those with over 250 employees) SMEs accounted for 60% of all employment and 52% of all turnover at the start of 2019. The construction industry accounts for nearly 20% of all small businesses, with wholesale & retail and professional, scientific & technical also strongly represented.

If you're a small business owner in need of some help with the financial basics, why not order a copy of "Small Business Financial Management" today - it's a brand new guidebook for small business owners who want to read all about the basics of organising and managing business finances.

To learn more about the different ways we assist small businesses, read our accountancy services page here.

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