How many businesses are there in the UK and what is the reality about their contribution to the economy?

In October 2010 the Department for Business Innovation and Skills published a report entitled ‘Small and Medium-sized Enterprise (SME) Statistics for the UK and Regions 2009’. This revealed that at the beginning of 2009 there were about 4.8 million private sector businesses in the UK, which was an increase of 1.1% or 51,000 since the start of 2008.

Interestingly the vast majority of these enterprises were small and had between 0 and 49 employees. In percentage terms these small enterprises accounted for 99.3% of the total number of businesses in the UK. Only 0.1% of businesses were large organisations with more than 250 employees.

Small enterprises also provided 48.2% of all the employment in the UK out of an estimated total of 22.8 million people employed.

At the beginning of 2009 there were around 3.1 million sole proprietors in the UK and almost 10% of these had employees. By March 2010 however sole proprietors had decreased from 24.4% of all enterprises in the UK to 23.8%.

The number of private sector enterprises varies considerably across the UK, with London having 840,000 in 2009, closely followed by the South East of England with 740,000. In contrast the North East of England had less than 200,000.

All regions suffered a decline in the number of businesses during 2009 to 2010, the greatest decreases in numbers being in the North West and West Midlands.

Whilst some commentators suggest that 50% of all businesses fail within the first year,  Government statistics from 2010 show that in fact 43.5% of the businesses included in their figures were 10 years old or more.

At least 400,000 new businesses start each year and Companies House reported that  362,000 businesses had incorporated in the financial year 2009/10, which is of course in addition to new sole proprietors starting up.

With the new Government’s culture of encouraging growth in the economy through business start up and expansion, these figures can only be set to increase in the future. As the statistics show, small businesses have a huge role to play in the economy and are already contributing greatly to employment opportunities in their respective regions.

If this article has inspired you to start a business, then contact your nearest NBSL Business Advice Centre for more information and help in developing your business skills.