39 Key Small Business Statistics to Guide You in 2023

Every great business starts small, just as every journey starts from small beginnings. Small business statistics show that small and medium enterprises make up 99.9% of the whole business population. So, we can, without a doubt, say that they are the driving force of the UK economy, and our success largely depends on them.

From the following statistics, you will see just how big an impact small and medium companies have on the UK and its business population.

Small Business Statistics in the UK in 2020

1. There were almost 6 million SMEs in the UK in 2020.

(Statista)

In 2020, there were 5.97 million small and medium businesses in the UK. Compared to the number of small businesses in the UK, it’s 110,000 more. Compared to 2018, it’s 300,000 more.

2. In 2020, micro-sized businesses employed over 4 million people.

(Statista)

Out of 16 million people employed by small and medium businesses in the UK, 4.19 million were employed by micro-sized companies, according to small business statistics in the UK.

3. In 2020, small businesses made a turnover of £1.6 trillion.

(GOV.UK)

In 2020, small businesses accounted for 48% of employment and made a revenue of £1.6 trillion, according to small business facts in the UK. In comparison, large companies made a turnover of £2.1 trillion.

4. SMEs accounted for 61% of employment in 2020.

(FSB)

SMEs were responsible for three-fifths of the overall employment in the UK. Looking at small business statistics in 2018, you will see that the number of employees in small businesses has risen over the years.

Additionally, SMEs in the UK had a total turnover of £2.3 trillion, accounting for 52% of all private sector revenue in the UK in 2020. Some of the most profitable small businesses in the UK contributing to this are fashion stores, herbal food stores, and real estate businesses.

5. In 2020, 4.6 million small businesses had no employees.

(FSB)

There were almost 6 million small businesses in 2020, and from those 6 million, only 1.4 small businesses had employees. In addition, if you’re wondering how many small businesses in the UK do not employ anyone aside from the owner, the answer is 76%.

6. 29% of SMB owners think leaving the European Union will hurt their business.

(British Business Bank)

This percentage increased from 22% in 2017. Nearly one-third of small business owners think that the UK leaving the European Union will hurt their business. Furthermore, small business lending trends show that 34% of small business owners believe it will be harder to access finance after exiting the EU.

7. In 2020, over 600,000 SMEs were at risk of closing down.

(Scottish Financial News)

Small business closing statistics show us that the number of small businesses closing down has been increasing year after year. In 2020 alone, over 600,000 SMEs were expected to declare bankruptcy. According to small business failure stats, from 2014 to 2018, businesses closed down at an annual average rate of 10.18%. Additionally, from 2018 to 2019, 508,865 companies in the UK closed down.

Small Business Trends

8. From 2000 to 2020, the UK business population increased by 72%.

(GOV.UK)

Small businesses are continually evolving and increasing over the years. That is why, over the last two decades, small business growth in the UK has been massive. Specifically, the business population has been growing at an average annual rate of 3% and has increased by 72% since 2000.

9. The highest increase recorded of the UK’s overall business population is 7%.

(GOV.UK)

We can see that the business population is continually rising, and it shows no signs of slowing down anytime soon, as shown in small business startup statistics. That said, in the last 20 years, the business population increased by 2.5 million. Interestingly, the highest increase of 7% was recorded in 2003–2004 and 2013–2014.

10. In the last two years, the number of private sector businesses grew by 1.9%.

(GOV.UK)

According to the latest small business trends, the total population of private sector businesses grew by 113,000 during the past two years. In addition, 3,000 were employing businesses, and 110,000 were non-employing businesses.

11. Since 2000, the number of SMEs in the UK has increased by 73%.

(GOV.UK)

Small business statistics for 2021 are not yet available, but from 2000 to 2020, SMEs in the UK have increased by 73%. This translates to an increase in SMEs by 2.5 million. Of this number, 301,000 were employing companies. The rest did not have any employees except for the owner, so they weren’t contributing to the UK labour market.

12. 20% of small businesses fail in their first year.

(Fundsquire)

Looking at the statistics on small business failures can be disheartening since it shows that 20% of small businesses don’t make it past their first year of operating. That’s an astounding percentage, considering that over 835,000 new companies were registered in the UK in 2020.

Small Business Statistics by Industry

13. 27% of SMEs are in real estate.

(Statista)

A little over a quarter of all small and medium businesses are in the real estate industry. This is probably because the most profitable small businesses belong to this industry. Coming in second place with 19% are SMEs from the construction sector.

14. 15% of all SMEs are professional, scientific, and technical companies.

(FSB)

According to recent small business stats, over 850,000 small and medium business enterprises operate in the professional, scientific, and technical industries, while 9% or 552,000 are in the repair services sector.

15. 3% of SMEs belong to the agriculture, hunting, forestry, and fishing sectors.

(FSB)

This sector has the least number of small businesses in the UK. However, it has a 10-year success rate of 83%, which is the highest rate among all SME sectors. Additionally, hotels and restaurants make up 4% of all SMEs in the UK.

16. SMEs in the retail industry have a 10-year success rate of 40%.

(The UK Domain)

Knowing and understanding small business survival statistics will help aspiring business owners and entrepreneurs determine which sectors they should venture into. Knowing why and how many entrepreneurs fail will serve as a guideline for those aspiring to succeed. With a 10-year success rate of 40%, the retail industry falls under a moderate success rate.

Composition of Small Businesses in the UK

17. London has the most private sector businesses in the UK.

(FSB)

There are over 1.1 million private sector businesses in London, which, along with the South East private sector businesses, accounts for 35% of the UK’s business population. In comparison, the North East has the least with only 163,000. Additionally, small businesses in London are expected to rise in the coming years.

18. London has 1,593 businesses for every 10,000 adult residents.

(UK Parliament)

When it comes to the number of businesses per 10,000 citizens, London is well above the national average with 1,593 companies. However, London is not the only region above the UK’s national average as the South East, South West, and East of England are also above it.

19. In 2020, 32.27% of small businesses were owned by women.

(UENI)

In the last four years, there has been a 15% increase in women small business owners. According to recent statistics, women small business owners make up 32.27% of the overall population of small business owners in the UK. On the other hand, 67.63% of UK small business owners are male.

20. The most female-dominated small business category is hair and beauty.

(UENI)

Small business owner statistics show that women run approximately 76% of hair and beauty companies, and roughly 24% are run by men. This comes as no surprise, of course. Other business categories that women largely dominate include gifts and occasions, consumables, wellness, and pet care.

21. The most common legal form of business in the private sector are sole proprietorships.

(GOV.UK)

As small business technology trends open up more opportunities for individuals to try their luck in the business world, the UK business private sector sees more sole proprietorships. In 2020, 3.5 million sole proprietorships were recorded, which makes up 59% of the UK’s private business sector population.

22. In 2020, 44% of businesses were registered for VAT or PAYE.

(GOV.UK)

According to UK small business statistics recorded by the Office for National Statistics in 2020, 2.7 million businesses were registered for VAT or PAYE in the private business sector. In addition, 56% of enterprises traded without being registered for VAT or PAYE.

23. Only 12% of sole proprietorships were registered for VAT or PAYE.

(GOV.UK)

Small business economic trends show that only a mere 12% of sole proprietorships were registered for VAT or PAYE in 2020. On the other hand, ordinary partnerships lead the way, with the highest percentage of businesses registered for VAT or PAYE at 47%.

24. In 2020, Northern Ireland had the least private sector businesses.

(GOV.UK)

With only 148,000 private sector businesses in Northern Island, private-sector small business statistics in 2020 show us that this UK region comes last on the list. England leads the way with 5.3 million private sector enterprises. Scotland comes second with 370,000, while Wales has 209,000.

Statistics on Small Business Internet Marketing

25. 57% of SMEs use social media for advertising.

(Social Buzzing)

Social media platforms are one of the most powerful media for small businesses to advertise their products and services. That is why small business and social media statistics show that over 57% of SMEs use social media as an advertising tool, while 39% use blogs. It’s no wonder why digital marketing roles have been so in demand as of late.

26. SMEs spend anywhere from £9,000 to £10,000 per month on Google advertising.

(WebFX)

Small business advertising statistics tell us that small companies pay between £9,000 and £10,000 per month on advertising on Google Ads. This amount does not include additional costs, such as software.

27. 64% of SME owners turn to social media for business advice.

(Business Insider)

When it comes to running a small business, market trends are something to watch out for. For this, 64% of small business owners turn to social media when they need business advice. However, those who have the budget can also hire a marketing expert to help them. On the other hand, 62% consult industry colleagues and 52% run internet searches.

The Impact of COVID-19 on

Small Business Statistics

28. In 2020, it was estimated that COVID-19 could cost small businesses in the UK over £69 billion.

(Simply Business)

The COVID-19 pandemic hit the SMEs in the UK hard as 67% of them were forced to stop operating temporarily. That being said, according to small business statistics in 2020, COVID has caused small business owners to suffer an average loss of £11,779.

29. In 2020, 17% of small businesses in the UK said they wouldn’t survive another lockdown.

(Simply Business)

Last year, the statistics on small business success rate was not looking too good, as 17% of small enterprises in the UK stated that another lockdown would be catastrophic for their business. This caused a rise in unemployment figures. Although 32% said that they would endure another lockdown, they still felt that another lockdown would have had worse effects for them than the first one.

30. During the COVID-19 pandemic, 90% of firms in Thailand were expecting a severe loss in revenue.

(Allianz Care)

According to small business statistics, the COVID pandemic that occurred in 2020 took a toll on small and medium businesses. While 96% of US SMEs had been severely hit by the pandemic in March 2020, according to small business revenue statistics that year, 90% of firms in Thailand were also expecting to suffer from extreme revenue loss in May.

31. One-third of SMBs worldwide reported reducing their workforce due to the COVID-19 pandemic.

(Facebook)

Aside from revenue loss, the pandemic has also caused a rise in unemployment figures, as shown in small business job creation statistics. Despite this, its impact on employment varied in each region and country.

Higher-income countries received employment and salary support systems, so the effects of the pandemic were not as bad as those in low and medium-income countries.

Global Small Business Statistics

32. There are approximately 400 million SMEs worldwide.

(Global NAPs)

These businesses are the backbone of the world’s economy. According to small business statistics, small and medium businesses make up 95% of the total business population. Furthermore, with approximately 400 million globally, it is no surprise that they employ 60% to 70% of the global labour force.

33. In the US, almost 20% of rural small businesses generate more than 80% of their sales online.

(Statista)

As small business eCommerce statistics show, more and more businesses generate most of their sales online. As such, 30.1% of rural small businesses get more than 60% of their sales online. However, a huge portion of rural SMEs (33.4%) still depend primarily on in-person sales.

34. In the US, the average yearly sales of small businesses is $46,978.

(Business Know-How)

The latest available small business sales statistics in the US show that the average yearly sales of small businesses are only $46,978. Furthermore, 45% of small businesses reported revenues of just $25,000 per year.

35. In the US, 43% of small businesses don’t have a cybersecurity plan in place.

(Cision PRWeb)

According to small business and data breach statistics, over a quarter of data breaches involve small businesses. Despite this, nearly half of small businesses don’t have a cybersecurity plan in place, which is quite alarming.

Furthermore, 60% of small business owners think they won’t be targets of any cyberattacks. However, according to small business statistics, data loss resulting from cyber attacks cost small businesses an average of $200,000, highlighting how important cybersecurity jobs are.

36. East Asia and Pacific MSMEs make up the largest percentage of the global finance gap.

(The World Bank)

When it comes to statistics on small business creation, some countries may have it harder than others. According to the International Finance Corporation (IFC) estimations, 40% of micro, small, and medium enterprises (MSMEs) in developing countries lack $5.2 trillion in financing every year.

This equates to 65 million businesses with a huge finance gap, 46% of which are located in East Asia and the Pacific. Despite this, an increase in small business ownership statistics is still noted each year.

37. In the US, corruption is the most common fraud scheme among SMEs.

(Business Fraud Prevention)

Businesses of any scale may encounter fraud at some point during their operation. Small business fraud statistics show us that corruption is the most common type. As such, 32% of SMEs experience it in the US, and the average loss it causes reaches $850,000.

38. 64% of small businesses in the US have a website.

(Clutch)

According to small business website stats in the US, almost two-thirds of small businesses have a website. Interestingly, 28% of them say that they spent less than $500 to make the website.

39. 40% of the US small business owners have no insurance.

(Insureon)

Statistics on small business insurance show that four out of ten small business owners in the US are not insured. Additionally, out of those that are insured, 75% of them are underinsured. Knowing that almost a third of small businesses experienced an incident that led to an insurance claim back in 2017, this fact is undoubtedly worrying.

Conclusion

Small businesses contribute largely to driving the UK economy forward—and other countries’ economies, for that matter. That is why before venturing into any small business industry, knowing these UK small business statistics for 2021 will serve as a guide on how you can run your organisation efficiently and improve it into a meaningful and long-term business. If you want to open a small business but don’t know where to start, you can think about how you can turn your passion or hobbies into money.

Frequently Asked Questions

Sources:

• Allianz Care
• British Business Bank
• Business Fraud Prevention
• Business Insider
• Business Know-How
• Cision PRWeb
• Clutch
• Facebook
• FSB
• Fundsquire
• Global NAPs
• GOV.UK
• GOV.UK
• Insureon
• Scottish Financial News
• Simply Business
• Simply Business
• Social Buzzing
• Statista
• Statista
• Statista
• Statista
• The UK Domain
• The World Bank
• UENI
• UK Parliament
• WebFX