UK SMEs: Number, Employee Headcount And Turnover Details

How many people in the UK would like to start a business?

According to a Forbes Advisor poll, 41% of Brits would like to start their own business one day, 26% need the conditions to be right before starting a business, 23% prefer to be employed and 10% already own a business.

UK SME Overview

• As of October 2023, there were 5.6 million businesses in the UK (UK GOV)
• 5,547,000 qualify as either small or medium businesses, meaning that 99.05% of UK businesses are Small to Medium Enterprises (UK GOV)
• A small business has between 0 and 49 employees, and a medium business has between 50 and 249 employees
• Since 2010, the number of SMEs in the UK has grown by 1,070,000, from 4,477,000 to 5,547,000 (UK GOV)
• Of the 5,547,170 SMEs in the UK, 4,110,145 have no employees, meaning they are “sole proprietorships” or partnerships, where only the owner or owners work for the company

Growth in SME population since 2010

• 2010: 4,477,000
• 2019: 5,860,000
• 2020: 5,973,000
• 2021: 5,583,000
• 2022: 5,501,000
• 2023: 5,547,000

Gov.uk: Number of private sector businesses in the UK between 2010 and 2023

UK SME employment

• A breakdown of how many businesses fall into which employee number bands (UK GOV):
  • Zero to one employee: 4,241,185
  • Two to four employees: 773,070
  • Five to nine employees: 273,225
  • 10 to 19 employees: 144,320
  • 20 to 49 employees: 78,465
  • 50 to 99 employees: 24,455
  • 100 to 199 employees: 10,340
  • 200 to 249 employees: 2,110

• The 2021 Census estimated that there are 37.5 million working-age people in the UK, meaning that 24% of working-age adults work for or an SME as an employee or owner (UK GOV)

UK SME turnover

• UK SME business turnover by employee number band (UK GOV) :
  • One to nine employees: £592,131,000,000
  • 10 to 49 employees: £669,553,000,000
  • 50 to 249 employees: £762,947,000,000
• SMEs in the UK have a combined turnover of £2 trillion
• This accounts for 52% of the UK’s private sector £4.47 trillion total turnover (UK GOV)

UK SMEs by sector

• The number of businesses that qualify as an SME per UK economy sector (UK GOV):
  • Agriculture, Forestry and Fishing: 51,140
  • Mining, Electricity, Gas, Water Supply, Sewerage and Waste Management: 8,995
  • Manufacturing: 88,200
  • Construction: 195,860
  • Retail and Repair of Motor Vehicles: 247,560
  • Transportation and Storage: 51,735
  • Accommodation and Food Service Activities: 145,650
  • Information and Communication: 75,795
  • Financial and Insurance Activities: 24,180
  • Real Estate Activities: 50,740
  • Professional Services: 188,590
  • Administrative and Support Service Activities: 129,110
  • Education: 21,570
  • Human and Health and Social Work: 60,905
  • Arts, Entertainment, and Recreation: 27,805
  • Other Service Activities: 69,275

UK SMEs by region

• England:
  • North East: 156,200
  • North West: 544,300
  • Yorkshire and the Humber: 388,600
  • East Midlands: 381,400
  • West Midlands: 447,600
  • East of England: 568,500
  • London: 1,047,600
  • South East: 851,000
  • South West: 523,500
• Wales: 218,800
• Scotland: 297,800
• Northern Ireland: 121,900

Diversity in UK SME Leadership

• In 2021, 21% of all SMEs in the UK were led by women (UK GOV)
  • 14% of medium businesses were owned by women
  • 20% of small businesses were owned by women
  • 14% of micro businesses (0-9 employees) were owned by women
• 24% of SMEs in the UK are defined as “equally-led”, with an equal amount of men and women in the management team
• In 2021, 6% of UK SMEs were minority ethnic group-led (MEG-led)
• MEG-Led businesses as percentage of the business population by top sector:
  • Health: 10%
  • Administration: 9%
  • Information and communication: 8%
  • Accommodation and food transportation: 8%

Consumer attitudes towards small businesses

How many people shop at small businesses, and how? (Forbes Advisor Survey)

• 15% of consumers prefer to buy form small businesses unless a larger company is necessary
• 17% prefer to buy from larger names unless a small business is necessary
• 69% prefer to split their shopping between big and small businesses
• 45% of those who prefer to shop with small businesses do so both on and offline
• 42% prefer to do it in store
• 13% prefer to do it online

Why do people shop with small businesses? (Forbes Advisor Survey)

• Of those who prefer to shop with small businesses, these are the main reasons consumers gave:
  • I want my money to be spent within the community: 57%
  • I find the quality and service better: 43%
  • I find them more trustworthy: 37%
  • It’s easier to know when things are ethically sourced: 29%
  • Small companies with a reputation to protect are more accountable than larger businesses: 25%
  • I find them more accessible: 19%
  • I find them cheaper: 12%

What do people buy from small businesses?

• These are the items people prefer to buy from small businesses:
  • Gifts: 47%
  • Food/Groceries: 35%
  • Clothes/accessories/fashion: 27%
  • Services: 21%
  • Furniture/decoration/home: 19%
  • Arts and Entertainment: 18%
  • Professional services: 15%
  • Pharmaceuticals: 14%
  • Games/toys: 14%
  • Makeup/cosmetics: 10%
  • Electronics: 10%

How much more are people willing to pay for shopping at small businesses

• Less than 5%: 29%
• 5%: 21%
• 10%: 19%
• 15%: 5%
• 20%: 5%
• 25%: 3%