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UK Small Business Statistics

Business Population Estimates for the UK and Regions in 2018

small-business-statistics

Summary

  • There were 5.6 million small businesses at the start of 2018.
  • Compared with the previous year, the private sector business population fell by 0.5% (-27,000 businesses) whilst conversely private sector employment increased by 2% (+304,000).
  • This contrast is attributable to the number of smaller non-employing businesses falling by 1% (-50,000) but the number of larger employing businesses rising by 2% (+23,000).
  • The decrease in the business population is the first fall in the series, which started in 2000. However, there were still 2.2 million (+63%) more businesses than in 2000.

SMEs and the Economy:

  • Small businesses accounted for 99.3% of all private sector businesses at the start of 2018 and 99.9% were small or medium-sized (SMEs).
  • Total employment in SMEs was 16.3 million; 60% of all private sector employment in the UK.
  • The combined annual turnover of SMEs was £2.0 trillion, 52% of all private sector turnover.

Composition of the business population:

  • In 2018 there were 1.4 million employing businesses and 4.3 million non-employing businesses. Therefore, 75% of businesses did not employ anyone aside from the owner(s).
  • The overall business population includes three main legal forms: there were 3.4 million sole proprietorships (59% of the total), 1.9 million companies (34%), and 405,000 ordinary partnerships (7%).
  • Of the 5.7 million businesses, 45% (2.6 million) were registered for VAT or PAYE.

Trends in the business population

  • Between 2000 and 2017, there was sustained growth in the business population each year but most recently there has been a fall of 27,000 businesses (-0.5%) between 2017 and 2018. Nonetheless, there were still 2.2m (+63%) more businesses than in 2000.
  • The majority of population growth since 2000 has been due to non-employing businesses, which accounted for 87% of the overall increase.
  • Between 2017 and 2018, whilst the number of employing businesses increased by 23,000, non-employing businesses fell by 50,000, resulting in an overall decrease of 27,000 businesses.
  • The number of companies has increased in the last year by 31,000 (+2%) whilst the number of sole proprietorships and ordinary partnerships fell by 49,000 (-1%) and 9,000 (-2%) respectively.

Locations and industries

  • The number of businesses per person (business density) is higher in southern England than elsewhere in the UK.
  • SMEs account for at least 99.5% of the businesses in every main industry sector.
  • Nearly a fifth of all SMEs operate in Construction, compared with less than 1% in the Mining, Quarrying and Utilities sector.