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UK Small Business Overview Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Small Business Overview market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points covered

  • Brexit – more or less important to small businesses than multi-nationals?
  • How do potential suppliers reach small businesses?

What you need to know

Over 99% of companies in the UK are small businesses, representing more than 5.7 million companies. They are highly significant to the economy, accounting for 34.5% of overall turnover at £1428.4 billion. They also account for 39% of all employment in the UK. The turnover growth achieved by small businesses reached 19.4% between 2014 and 2018. This growth outpaced the development of large businesses, where growth was restricted to less than 14% over the period. Between 2014 and 2018, the turnover of sole traders increased by 17.3%, while other micro companies achieved growth of 27% and other small companies saw turnover rise by 15%. In contrast to mediumterm developments, sole trader income grew by less than 1% in 2018, while the sales of other micro companies fell by 4%, but other small businesses achieved growth of more than 9%, well ahead of wider economic developments.

Small businesses are active in every sector of commerce and industry. By far the largest market for them is the wholesale and retail sector, which is more than twice the size of any other market for small businesses. Construction is another industry where small businesses gain appreciable turnover, with tradesmen often operating directly to customers or through subcontracted assignments.

Regional data is only available for the private sector, but this covers 98% of the turnover of small companies. Unsurprisingly, London is the most important region for the small business sector, accounting for almost 30% of entire UK output. However, the role of small businesses in London - at 39% of the region’s economy - is far lower than other areas. In Northern Ireland, small businesses account for half the economy, while, by contrast, in North East England, they only account for 24% of the local economy.

Expert analysis from a specialist in the field

Written by Terry Leggett, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Over 99% of companies in the UK are small businesses. There are more than 5.7 million and they account for 34.5% of the overall economy, at £1,428.4 billion. They also account for 39% of all employment in the UK. In the last five years, their overall turnover growth has outperformed large corporates - at 19.4% compared with 14%, and their combined turnover is more than double medium-sized enterprises. However, they form a notoriously difficult sector for B2B marketers to target because of their disparity. Terry Leggett
Senior B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Figure 1: Definition of company sizes (number of staff and millions of Euros for turnover or balance sheet)
    • Executive Summary

        • The market
          • Growth slowed in 2018
            • Figure 2: Turnover development of small businesses, 2014-18
          • Micro companies gain the fastest growth, but not in 2018
            • Figure 3: Turnover analysis of small businesses, by size of company, 2014-18
          • Wholesale/retail leads market segmentation
            • Figure 4: Breakdown of small business turnover, by sector, 2018
          • Small businesses have strongest penetration in agriculture
            • Figure 5: Sector penetration of small businesses, by sector, 2018
          • London the major market
            • Figure 6: Regional breakdown of small business turnover in the private sector, by region, 2018
          • Small businesses represent half the Northern Irish economy
            • Figure 7: Economic penetration of regions by small businesses, 2018
          • Legislation/regulation seen to be a bigger obstacle than Brexit
            • Figure 8: Identified obstacles to running an SME, first half 2018
          • Companies and brands
            • An important sector
              • Figure 9: The role of the small business, 2018
            • A disparate sector
              • Figure 10: Analysis of the small business sector, by number of companies, 2018
            • What we think
            • Issues and Insights

              • Brexit – more or less important to small businesses than multi-nationals?
                • The facts
                  • The implications
                    • How do potential suppliers reach small businesses?
                      • The facts
                        • The implications
                        • The Market – What You Need to Know

                          • Five-year growth faster than large companies, but slowing
                            • Growth inhibitors
                              • Figure 11: Identified obstacles to running an SME, first half 2018
                            • Technology leading new start-ups
                            • Market Size

                              • Constant growth of small businesses
                                • Figure 12: Turnover development of small businesses, 2014-18
                              • Faster growth than large businesses
                                • Figure 13: Comparison of turnover development of small businesses, and medium and large enterprises, 2014-18
                              • Growth expectations and obstacles
                                • The role of small businesses
                                  • Figure 14: The role of the small business, 2018
                              • Market Segmentation by Size of Company

                                • Sole traders, micro companies and other small businesses
                                  • Turnover
                                    • Figure 15: Turnover analysis of small businesses, by size of company, 2014-18
                                  • Lower employment by sole traders
                                    • Figure 16: Employment by small businesses, by size of company, 2014-18
                                • Market Segmentation by Industry

                                  • Overview
                                    • Small businesses
                                      • Figure 17: Breakdown of small business turnover, by sector, 2018
                                      • Figure 18: Sector penetration of small businesses, by sector, 2018
                                    • Sole traders
                                      • Figure 19: Sector penetration of sole traders, by sector, 2018
                                    • Other micro
                                      • Figure 20: Sector penetration of other micro companies, by sector, 2018
                                    • Other small businesses
                                      • Figure 21: Sector penetration of other small companies, by sector, 2018
                                    • Agriculture, forestry and fishing
                                      • Figure 22: Breakdown of the agriculture, forestry and fishing sector turnover, by size of company, 2018
                                    • Mining and quarrying, utilities and waste
                                      • Figure 23: Breakdown of the mining and quarrying, utilities and waste sector turnover, by size of company, 2018
                                    • Manufacturing
                                      • Figure 24: Breakdown of the manufacturing sector turnover, by size of company, 2018
                                    • Construction
                                      • Figure 25: Breakdown of the construction sector turnover, by size of company, 2018
                                    • Wholesale and retail
                                      • Figure 26: Breakdown of the wholesale and retail sector turnover, by size of company, 2018
                                    • Transportation and storage
                                      • Figure 27: Breakdown of the transportation and storage sector turnover, by size of company, 2018
                                    • Accommodation and food services
                                      • Figure 28: Breakdown of the accommodation and food services sector turnover, by size of company, 2018
                                    • Information and communication
                                      • Figure 29: Breakdown of the information and communication sector turnover, by size of company, 2018
                                    • Financial and insurance activities
                                      • Real estate activities
                                        • Figure 30: Breakdown of the real estate sector turnover, by size of company, 2018
                                      • Professional, scientific and technical activities
                                        • Figure 31: Breakdown of the professional, scientific and technical activities sector turnover, by size of company, 2018
                                      • Administrative and support services
                                        • Figure 32: Breakdown of the administrative and support services sector turnover, by size of company, 2018
                                      • Education
                                        • Figure 33: Breakdown of the education sector turnover, by size of company, 2018
                                      • Human health and social work activities
                                        • Figure 34: Breakdown of the human health and social work activities sector turnover, by size of company, 2018
                                      • Arts, entertainment and recreation
                                        • Figure 35: Breakdown of the arts, entertainment and recreation sector turnover, by size of company, 2018
                                      • Other service activities
                                        • Figure 36: Breakdown of the other service activities sector turnover, by size of company, 2018
                                    • Market Segmentation by Region

                                      • Overview
                                        • Small businesses
                                          • Figure 37: Regional breakdown of small business turnover in the private sector, by region, 2018
                                          • Figure 38: Economic penetration of regions by small businesses, 2018
                                        • Sole traders
                                          • Figure 39: Economic penetration of regions by sole traders, 2018
                                        • Other micro businesses
                                          • Figure 40: Economic penetration of regions by other micro companies, 2018
                                        • Other small businesses
                                          • Figure 41: Economic penetration of regions by other small companies, 2018
                                        • North East
                                          • Figure 42: Breakdown of the North East Economy, by size of company, 2018
                                        • North West
                                          • Figure 43: Breakdown of the North West economy, by size of company, 2018
                                        • Yorkshire and the Humber
                                          • Figure 44: Breakdown of the Yorkshire and the Humber economy, by size of company, 2018
                                        • East Midlands
                                          • Figure 45: Breakdown of the East Midlands economy, by size of company, 2018
                                        • West Midlands
                                          • Figure 46: Breakdown of the West Midlands economy, by size of company, 2018
                                        • East of England
                                          • Figure 47: Breakdown of the East of England economy, by size of company, 2018
                                        • London
                                          • Figure 48: Breakdown of the London economy, by size of company, 2018
                                        • South East
                                          • Figure 49: Breakdown of the South East economy, by size of company, 2018
                                        • South West
                                          • Figure 50: Breakdown of the South West economy, by size of company, 2018
                                        • Wales
                                          • Figure 51: Breakdown of the Wales economy, by size of company, 2018
                                        • Scotland
                                          • Figure 52: Breakdown of the Scotland economy, by size of company, 2018
                                        • Northern Ireland
                                          • Figure 53: Breakdown of the Scotland economy, by size of company, 2018
                                      • Success Factors for Small Businesses

                                        • General factors
                                          • Why companies fail
                                          • The Impact of the Economy

                                              • GDP
                                                • Figure 54: GDP overall quarterly development, Q4 2016-Q2 2018
                                                • Figure 55: GDP quarterly development, by sector, 2004-18
                                                • Figure 56: Forecast GDP development, 2017-22
                                            • Market Trends

                                              • Business churn
                                                • Figure 57: Business births and deaths, 2012-16
                                              • Legislative pressures on margins
                                                • Living wage
                                                  • Figure 58: National living wage rates, 2016-18
                                                • The Apprenticeship Levy
                                                  • Workplace pensions
                                                      • Figure 59: Composition and progression of workplace pension contributions, 2012-19 (% of earnings)
                                                    • Business rates
                                                    • Market Drivers

                                                      • Brexit
                                                        • Figure 60: Specific SME Brexit concerns, 2018
                                                        • Figure 61: Brexit seen as a major obstacle to success, by size of company
                                                        • Figure 62: Brexit seen as a major obstacle to success, by innovation capacity and international trading activity
                                                      • Access to finance
                                                        • Small business grants
                                                          • The internet
                                                            • Figure 63: Worldwide internet usage, by region 2010-17 (millions and %)
                                                            • Figure 64: Proportion of businesses with internet access in the UK, by size of company, 2012-16 (%)
                                                            • Figure 65: Proportion of businesses with Internet access and type of connection, by number of employees, 2012-16 (%)
                                                            • Figure 66: Proportion of businesses by maximum contracted internet connection speed, by number of employees, 2012-16 (%)
                                                          • Serviced offices
                                                              • Figure 67: Market for serviced offices, 2013-17 actual and 2018-23 forecast
                                                          • Industry Structure

                                                              • Figure 68: Analysis of the small business sector, by number of companies, 2018
                                                              • Figure 69: Analysis of the small business sector, by employment, 2018 (000s employed)
                                                              • Figure 70: Analysis of the small business sector, by turnover, 2018 (£ billion)
                                                              • Figure 71: Activity breakdown of small businesses, by sector, 2018
                                                              • Figure 72: Regional breakdown of small businesses, by region, 2018
                                                              • Figure 73: Analysis of the legal status of the small business sector, by number of companies, 2018
                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                              • Abbreviations
                                                                • Methodology