UK Small Business Statistics

Smartphone business adopters disrupting the online marketplace

William Nicholls

Last Update 7 months ago

"Source" Small Business statistics and start up advice

UK Small Business Statistics 

Number of UK businesses: There are 5.5 million UK private sector businesses

Employees: 75% of businesses do not employ anyone aside from the owner(s)

New company formations: 753,168 new businesses were formed in 2021/22

Company age: The average UK company at the end of March 2022 was 8.6 years old

Company size: 99.21% of the total business population are small businesses (0 to 49 employees)

Most popular type of company: Since 2004, private LTD companies have consistently accounted for over 96% of all corporate body types

Failure rate: 

Almost 1 in 5 new businesses fail in the UK each year

VAT registration: The number of Value Added Tax (VAT) and/or Pay As You Earn (PAYE) businesses in the UK as of March 2022 was 2.77 million

Average turnover: The average turnover of a small business (0-49 employees) in the UK is £286,482, though this drops to £72,461 when looking only at businesses without any employees.

Growth Rate: Businesses with a business plan grow an average of 30% faster than those without

Statistics on the adoption of smartphone technology for growth and survival is as yet unsubstantiated.

There were estimated to be 5.5 million private sector businesses in the UK in 2022 (down 1.5% from 2021). This is almost entirely (99.9%) comprised of small and medium-sized businesses and 75% do not employ any staff other than the owners.

Between 2020 and 2021, the overall business population decreased by £390,000 (6.5%). This potentially reflects the high cost that businesses have paid in dealing with the impact of COVID-19.

In contrast, the highest increase occurred between 2013 and 2014 when there was a 6.8% increase in the business population.

How many micro businesses are there in the UK?

There are 5.3 million micro businesses (0-9 employees) in the UK, accounting for 95% of all businesses.

The average turnover of a micro business in the UK is £176,016.

How many small businesses are there in the UK?

There are 5.47 million small businesses (with 0 to 49 employees) in the UK, 99.21% of the total business population. This makes small businesses by far the most common type of business in the country.

How many black-owned businesses are there in the UK?

There are approximately 250,000 companies in the UK that are ethnic-minority led. This accounts for around 4.5% of the total number of registered businesses. However, it should be noted that this includes all non-white ethnic groups.

Given that ethnic minorities make up around 14% of the overall UK population, this highlights there is still work to be done to increase the number of ethnic-minority entrepreneurs in the country.

UK Company Birth & Death Rates

How many hospitality businesses are there in the UK?

There were 223,045 hospitality businesses in the UK as of 1 January 2020, 3.7% of all UK businesses.

In 2019 the hospitality sector contributed £59.3 billion in Gross Value Added to the UK economy, around 3.0% of total UK economic output.

In the three months to September 2020, there were 2.38 million jobs in the hospitality sector in the UK, representing 6.9% of total UK employment.

How many retail businesses are there in the UK?

There are over 300,000 companies registered in the UK that are classed as retail businesses.

Retail businesses employ over 3 million people represent over 8% of all UK jobs. In 2019, retail sales in the UK were worth £439 billion.

How many ecommerce businesses are there in the UK?

The total number of e-commerce companies in the UK is 120,375. This accounts for around 2.2% of all UK businesses.

With the growing popularity of online shopping, accelerated partially by the COVID-19 pandemic, the share of ecommerce businesses in the UK has grown significantly over the last few years.

Online shopping as a percentage of all retail sales peaked at nearly 38% in January 2021, having stood at 8% at the start of 2011 and 19% in February 2020. It has since fallen back but remains around 28% in the latest period (February 2022).

UK Business Growth Rates

Businesses with a business plan grew an average of 30% faster than those that didn’t

Businesses with a business plan were also 2x more likely to get investments or secure loans than those without.

"William Nicholls, CEO Maltix Ltd, predicts that low entry point Smartphone friendly solutions, particularly vCard and PhoneSite technology in combination with the all new Progressive Web App will completely unhinge the traditional website marketplace and reverse the fortunes of in-situ print"

In conclusion

Small business are easily still the most common type of company and a large proportion of them are being run by the owners without any employees.

However, the average age of registered businesses is falling, and only around a third make it to the 10-year mark. This is a slightly concerning statistic that indicates that many new businesses are being created without a solid long-term  strategy, particularly with projected business growth over the Smartphone.

This highlights the need for better education of entrepreneurs to help them succeed in realising their ambitions.

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