With the Department of Business, Energy & Industrial Strategy recently publishing information and statistics on private sector businesses in the UK (from the beginning of 2021), we have brought together the most important data, breaking down by the number of employees, industry, geography, legal status and Covid-19 impacts. (We have also sourced data from other sources):
Jump to Section:
- Headline UK Business Data
- UK Business Composition
- SME Business Finance breakdown
- Interesting Small Business Statistics to Mention
Headline UK Business Data
This section summarises all the most telling and important SME Statistics taken from this article.
At the start of 2021
5.6 MILLION businesses were in the UK
Of which
- 5.5 Million of the businesses were small (Employing 0-49 people)
- 35,600 businesses were medium-sized (Employing 50-249 people)
- 7,700 businesses were large (Employing 250 or more people)
Compared with 2020:
Data suggests that there was a population decrease of 6.5% (389,600 businesses lost)
With the pandemic spreading across the UK over the last 2 years lockdowns, furloughs and many other effects on businesses were forced upon employers. It’s clear to see that potential entrepreneurs have avoided starting businesses due to the volatility in almost every industry and market during COVID-19.
- London and Southern regions have more small businesses than any other region in the UK.
- A study carried out by UENI found that approximately 7205 of the 22,257 businesses were started by women.
- Over 10 years, the number of small businesses in the UK grew 21.9% from 4,551,700 in 2011 to 5,547,625 at the beginning of 2021; year-on-year growth, however, was a decrease between 2020 and 2021 (-6.6%).
- Based on the 2020 and 2021 data it suggests that industries that took the biggest hit due to Covid-19 were; Administrative and Support Service Activities, Construction & Arts, Entertainment and Recreation.
- Based on the 2020 and 2021 data it suggests that industries that saw the largest increases in the business make-up over the COVID period were; Wholesale, Retail Trade (especially eCommerce), Repair of Motor Vehicles and Professional, Scientific and Technical Activities.
UK Business Composition
There are 5.6 million SMEs (small and medium-sized enterprises) in the UK private sector, which is primarily non-employment and small businesses. At the start of 2021:
- According to estimates, there are 5.6 million private sector businesses in the UK
- 75% of those businesses did not employ anyone except for their owners, with 1.4 million businesses having employees and 4.2 million having no employees.
- 99.2% of all businesses were small businesses (with 0 to 49 employees), or 5.548 million businesses.
- There were 35,600 small businesses (with 50 to 249 employees) constituting 0.6% of all businesses
- The remaining 7,700 businesses (with 250 or more employees) represented 0.1% of all businesses.
| Business Class/Size | |
|---|---|
| Total Businesses (Small, Medium & Large) | 5,590,900 |
| SMEs (Small & Medium / 0-249 employees) | 5,583,245 |
| Small Business Only (0-49 employees) | 5,547,625 |
| With no employees | 4,174,920 |
| UK employers | 1,415,980 |
| 1 – 9 employees | 1,162,155 |
| 10 – 49 employees | 210,550 |
| 50 – 249 employees | 35,620 |
| 250 or more employees | 7,655 |
Over 10 years, the number of small businesses in the UK grew 21.9% from 4,551,700 in 2011 to 5,547,625 at the beginning of 2021; year-on-year growth, however, was a decrease between 2020 and 2021 (-6.6%). This has been the largest decrease we have seen in over 20 years.
Take a look at the table below that details this information for the last 21 years, since 2020.
| SMALL BUSINESS GROWTH STATISTICS | Businesses with no employees | Businesses with 1 – 49 employees | Total Number of Small Businesses | Year-on-Year Growth in small business (%) |
|---|---|---|---|---|
| 2000 | 2,355,900 | 1,077,200 | 3,433,100 | |
| 2001 | 2,353,700 | 1,113,600 | 3,467,300 | 1.00% |
| 2002 | 2,411,400 | 1,124,100 | 3,535,500 | 1.97% |
| 2003 | 2,497,600 | 1,144,000 | 3,641,600 | 3.00% |
| 2004 | 2,763,000 | 1,127,700 | 3,890,700 | 6.84% |
| 2005 | 2,752,000 | 1,140,200 | 3,892,200 | 0.04% |
| 2006 | 2,930,500 | 1,159,500 | 4,090,000 | 5.08% |
| 2008 | 3,045,500 | 1,202,400 | 4,247,900 | 0.28% |
| 2009 | 3,137,800 | 1,201,200 | 4,339,000 | 2.14% |
| 2010 | 3,258,600 | 1,188,900 | 4,447,500 | 2.50% |
| 2011 | 3,377,400 | 1,174,300 | 4,551,700 | 2.34% |
| 2012 | 3,581,100 | 1,200,700 | 4,781,800 | 5.06% |
| 2013 | 3,703,600 | 1,173,700 | 4,877,300 | 2.00% |
| 2014 | 3,969,600 | 1,239,100 | 5,208,700 | 6.79% |
| 2015 | 4,089,300 | 1,272,400 | 5,361,700 | 2.94% |
| 2016 | 4,172,500 | 1,284,900 | 5,457,400 | 1.78% |
| 2017 | 4,327,700 | 1,325,700 | 5,653,400 | 3.59% |
| 2018 | 4,278,200 | 1,346,900 | 5,625,100 | -0.50% |
| 2019 | 4,457,900 | 1,366,600 | 5,824,500 | 3.54% |
| 2020 | 4,567,775 | 1,368,770 | 5,936,545 | 1.92% |
| 2021 | 4,174,920 | 1,372,705 | 5,547,625 | -6.55% |
Small Business Region breakdown
This section will outline each UK country & region and how many businesses are located within each area. It will also take a look at the growth of business in each location.
Summarised Statistics on the small business Regions:
- Unsurprisingly London comes in at first in having more small businesses than any other region within the UK with an estimated 986,466 – 28% more businesses in London than in 2010
- However, London had the greatest number of decreases (90,000), followed by the South East region (57,000). This is between 2020 & 2021
- On average, small businesses are increasing at a rate of 15%. It’s important to note that Covid-19 will have affected these numbers in a significant way. In fact, English private businesses decreased by 336,000, while Scottish, NI, and Welsh firms decreased by 28,000, 25,000 and 1,000, respectively.
| Region/Country | 2010 Business Population | 2021 Business Population | Change (%) |
|---|---|---|---|
| North East | 122,60 | 137,420 | 11% |
| North West | 432,700 | 495,254 | 13% |
| Yorkshire and the Humber | 329,100 | 384,210 | 14% |
| East Midlands | 300,200 | 342,129 | 12% |
| West Midlands | 354,600 | 415,627 | 15% |
| East of England | 465,700 | 536,475 | 13% |
| London | 712,700 | 986,466 | 28% |
| South East | 728,000 | 834,761 | 13% |
| South West | 411,700 | 490,458 | 16% |
SMEs Largest Industry Sectors
About 95% of all businesses are small and medium enterprises, so they establish the distribution of business populations across all major industry sectors. At the start of 2021:
- 16 % of all SMEs (913,000) operate in construction, compared to less than 1% in mining, quarrying, and utilities (29,000).
- In addition, there was a noteworthy number of SMEs in the Professional, Scientific, and Technical sectors (848,600 or 15%) as well as in the Wholesale and Retail Trade and Repair sector (556,000 or 10%).
- Based on the 2020 and 2021 data it suggests that industries that took the biggest hit due to Covid-19 were; Administrative and Support Service Activities, Construction & Arts, Entertainment and Recreation.
- Based on the 2020 and 2021 data it suggests that industries that saw the largest increases in the business make-up over the COVID period were; Wholesale, Retail Trade (especially eCommerce), Repair of Motor Vehicles and Professional, Scientific and Technical Activities.
In the table below we have detailed every industry and the make-up (%) of the total SME businesses in the UK.
| 2020 | 2021 | ||||
|---|---|---|---|---|---|
| Sector | Number of private sector SME businesses (95% of S/M/L Enterprises) | Industry Make-Up of total SME Business (%) | Number of private sector SME businesses (95% of S/M/L Enterprises) | Industry Make-Up of total SME Business (%) | Percentage Gain/Loss between 2020 & 2021 |
| Construction | 942,638 | 16.59 | 913,820 | 16.34 | -0.25 |
| Professional, Scientific and Technical Activities | 829,512 | 14.60 | 848,770 | 15.18 | 0.58 |
| Wholesale, Retail Trade, Repair of Motor Vehicles | 525,402 | 9.25 | 556,930 | 9.96 | 0.71 |
| Administrative and Support Service Activities | 500,161 | 8.80 | 465,905 | 8.33 | -0.47 |
| Information and Communication | 362,530 | 6.38 | 352,865 | 6.31 | -0.07 |
| Other Service Activities | 360,924 | 6.35 | 341,785 | 6.11 | -0.24 |
| Human Health and Social Work Activities | 346,152 | 6.09 | 339,055 | 6.06 | -0.03 |
| Transportation and Storage | 329,194 | 5.79 | 310,550 | 5.55 | -0.24 |
| Education | 308,760 | 5.43 | 298,250 | 5.33 | -0.10 |
| Arts, Entertainment and Recreation | 296,77 | 5.22 | 278,170 | 4.98 | -0.25 |
| Manufacturing | 274,056 | 4.82 | 270,000 | 4.83 | 0.01 |
| Accommodation and Food Service Activities | 211,893 | 3.73 | 200,645 | 3.59 | -0.14 |
| Agriculture, Forestry and Fishing | 147,573 | 2.60 | 152,620 | 2.73 | 0.13 |
| Real Estate Activities | 120,63 | 2.12 | 134,095 | 2.40 | 0.28 |
| Financial and Insurance Activities | 87,581 | 1.54 | 98,260 | 1.76 | 0.22 |
| Mining, Quarry, Electricity, Gas, Air Con, Water, Sewer, Waste | 37,710 | 0.66 | 29,190 | 0.52 | -0.14 |
SME Business Finance breakdown
At the start of 2021, there were 61% of employees and 52% of revenue generated by SMEs. SME employment and turnover are highest in the Wholesale and Retail Trade industry. At the start of 2021:
- There was 14% of all SME employment in wholesale and retail trade and repair, and 35% of all SME turnover in the UK private sector.
- In addition to construction (11%), professional, scientific, and technical (11%), and manufacturing (9%), almost a third of SME turnover was generated by these three sectors.
Employment & Turnover 3-Year breakdown
Below you can find a table that outlines both SME turnover and employment for the last 3 years:
| 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|
| Business Class/Size | 2021 Employment (thousands) | 2021 Turnover (Millions) | 2020 Employment (thousands) | 2020 Turnover (Millions) | 2019 Turnover (Millions) | 2019 Employment (thousands) |
| All businesses | 26,972 | 4,449,170 | 27,732 | 4,346,969 | 27,498 | 4,149,973 |
| SMEs (0-249 employees) | 16,333 | 2,309,836 | 16,836 | 2,270,22 | 16,63 | 2,168,005 |
| Small businesses (0-49 employees) | 12,859 | 1,589,296 | 13,302 | 1,576,540 | 13,157 | 1,528,684 |
| With no employees | 4,539 | 302,519 | 4,966 | 315,627 | 4,835 | 304,508 |
| All employers | 22,433 | 4,146,651 | 22,766 | 4,031,341 | 22,663 | 3,845,465 |
| 1-9 employees | 4,209 | 636,893 | 4,196 | 615,251 | 4,206 | 595,013 |
| 10-49 employees | 4,111 | 649,883 | 4,140 | 645,662 | 4,116 | 629,163 |
| 50-249 employees | 3,474 | 720,539 | 3,534 | 693,689 | 3,473 | 639,321 |
| 250 or more employees | 10,639 | 2,139,334 | 10,896 | 2,076,740 | 10,868 | 1,981,968 |
Large Business Revenue and Employment statistics
48% of revenue and 39% of employment was generated by large businesses. At the start of 2021:
- The UK private sector’s wholesale and retail trade and repair industry accounted for 25% of all large business employment and 35% of its total turnover in 2021.
- Accounting for 14% of the total, Administrative and Support Service Activities ranked second in terms of employment in large businesses.
- Manufacturing, which accounted for 20% of total large business turnover, was the second most lucrative sector.
Registration for VAT and PAYE
The majority of UK businesses in the private sector aren’t employers, and the majority of them are not VAT (value-added tax) or PAYE (pay as you earn) registered. At the beginning of 2021:
- Recordings from The Office for National Statistics detail that 2.7 million private sector businesses for PAYE or VAT. This is estimated to take up 48% of the estimated total population.
- Classified as ‘unregistered’, 2.9 million businesses (52%) traded without being registered for PAYE or VAT.
- 48% of ordinary partnerships and 13% of sole proprietorships were found to have been registered for either VAT or PAYE.
Interesting Small Business Statistics to Mention
- There was only one category that grew in numbers during the pandemic which was micro businesses. In fact, we saw an additional 5,300 companies being added.
- There was almost a 10% drop in 2021 in self-employed people compared to 2020 where we saw a 93% increase in the previous 20 years.
- Studies have shown that 73% of digital and social media marketers believe that running social media campaigns has had a good/very effective effect on their business.
- Female entrepreneurs have grown by 114% between 1997 and 2017.
- Data has suggested that 50% of small businesses fail within the first 5 years of trading.
- Small businesses are targeted the most in cyberattacks than any other business class (43% of all cyberattacks on businesses).
