The number of small businesses in the UK is growing according to new research. This bucks a trend where the UK’s larger business population has plateaued in recent years.
Specifically, the number of micro businesses with 0-9 employees in the UK has grown every year in the last decade.
But small businesses need more support to boost UK economic growth argue Mastercard. Business leader and activist Mary Portas says it’s ‘one of the most challenging times to be a small business owner’ with action needed from government and industry to support UK entrepreneurs.
Medium and large businesses plateaued in 2022
Overall, the number of medium and large businesses in the UK plateaued in 2022. But the number of UK micro and small businesses grew to 1.4 million in 2022, up 31,000 y-o-y. Growth in medium and large businesses in the UK has yet to return to the highest levels seen in 2020.
The UK’s smallest businesses are the least optimistic about their future performance, compared to medium and large businesses. Only 23.9% of businesses with 10 or fewer employees expect their performance to increase in the next 12 months. Those with 10 to 49 employees were also pessimistic, with only a third (33.7%) expecting their performance to improve.
In comparison, 43% of businesses with between 100 and 249 employees were optimistic about their future. They expect their performance to increase in the next 12 months.
Of all sectors, retailers were one of the least likely to have registered a strong performance last year. Only 15.3% say they’d seen an increase in their performance in the year up to April 2023. This is despite being the sector employing the most people and having the largest turnover.
Mastercard’s UK&I President, Kelly Devine, who commissioned the research, said: “Small businesses are the UK’s economic powerhouse. They comprise nearly 99% of all businesses, half of all business turnover, and employ two thirds of the working population. There’s no shortage of entrepreneurial ambition in the UK, but it’s worrying that their optimism lags behind big businesses. If we’re to boost growth, it’s vital that big business and government support small companies with skills, funding and policy so they can reach their potential.”
Businesswoman and activist Mary Portas added: “Small businesses really are the lifeblood of our economy. They’re innovative, creative, resilient. And despite the fact it’s one of the most challenging times to be a small business owner, their numbers are growing. People’s desire and appetite for what they do has also never been greater.
‘Yes. We know it continues to be an unpredictable world right now. But when you’re small and nimble it’s an opportunity to out manoeuvre the bigger players. Small business owners never fail to inspire me with their desire to do better, learn and flex themselves in the ever-evolving landscape of today’s business.”
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Small business growth outpaces larger companies according to new research