UK’s Business Community Reaches New Heights

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As 2019 draws to a close, newly released data shows that the total number of businesses in the UK has almost doubled in the 21st century.

In the past year alone 200,000 new private sector businesses have started trading, taking the total to 5.9 million, compared to 5.7 million in 2018.

A House of Commons Briefing Paper released this week shows that the total number of businesses in the UK has increased significantly since the year 2000 when there were only 3.5 million.

Businesses by size

In 2019 over 99% of businesses were small or medium-sized – employing fewer than 249 people.

5.6 million (96%) were micro-businesses – employing 0-9 people. These companies accounted for 33% of employment and 22% of turnover.

There were only 8,000 large businesses in the UK (employing over 250 people), but they accounted for 40% of employment and 48% of turnover.

Businesses by region

In 2019, there were 1.1 million companies in London, the most of any region or country in the UK.

London also had the highest number of businesses in relation to residents: there were 1,544 per 10,000 resident adults. One in three of all UK businesses are in London or the South East.

The lowest concentration was found in the North East of England with 694 businesses per 10,000 resident adults. In the UK as a whole there were 1,090 per 10,000 resident adults.

Overall there was a 4% increase in the number of UK businesses between 2018 and 2019, with Wales experiencing the largest increase of 12%. All other regions recorded an increase in the number of enterprises, except for Northern Ireland, East Midlands and the North East.

Businesses by industry

The service industries accounted for 74% of companies, 79% of employment and 71% of turnover. The retail industry accounted for 34% of turnover, but only 9% of businesses.

The manufacturing sector accounted for 5% of businesses, 10% of employment and 15% of turnover.

Business births and deaths

Moving back a year, in 2018, there were 381,000 business births and 336,000 deaths.

The business birth rate (the number of births as a proportion of active companies) was 13%. The death rate (the number of deaths as a proportion of active companies was 11%).

Female involvement in business

In 2018, 17% of SMEs employerss were led by women, a similar proportion to all years since 2014. The proportion of female leaders is higher for SMEs with no employees: 23%.

The UK has a relatively high gap between the proportion of women involved in early stage entrepreneurial activity, and the proportion of men involved in this activity: 5.7 percentage points.

The gap in the US is 4.1 percentage points. The gap in Germany is 3.3 percentage points and the gap in France is 1.7 percentage points.

In 2019, 32% of FTSE100 board seats were occupied by women. There were no all-male boards in the FTSE100.

Businesses owned by members of ethnic minorities

In 2018, 5% of SME employers were owned or led by people from ethnic minority backgrounds. Businesses led by people from ethnic minority backgrounds were most likely in the health sector (9%) and the retail sector (7%).

The most likely ethnicity of company owners in the UK was Indian, accounting for 36% of ethnic minority-led or owned organisations.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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