In 2021, there were 5.58 million private businesses in the UK and 99.9% were SMEs with less than 250 employees.

SME’s accounted for 51.9% of private sector turnover in 2020 and 53.6% of all private sector jobs in the UK (a total of 22.9 million).

Make no mistake about it, SMEs are crucial to the UK’s economy and their contribution is increasing every year.

In this article, we’ve collected all of the latest SME statistics to summarise the state of UK businesses in one easy read. We’ve also incorporated the latest data showing the impact of Covid-19 on UK businesses and how the recovery is well under way. 

UK SME Demographics

0 Million
private businesses were estimated to be operating in the UK at the start of 2021 (down 6.5% from 2020)
0 %
decrease in private sector businesses in 2021 compared to 2020 (389,600 fewer)
£ 0
Average turnover of businesses in the UK in 2021

Number of UK businesses in the private sector and their associated employment, employees and turnover (start of 2021)

Businesses Employees (thousands) Turnover
(£ millions)
With no employees 4,174,920 940 302,520
1 – 9 employees 1,162,155 3,826 636,893
10 – 49 employees 210,550 4,054 649,883
50 – 250 employees 35,620 3,458 720,540
250 + employees 7,655 10,622 2,139,335
All businesses 5,590,900 22,899 4,449,170

Proportion of employment and turnover by business size (2021)

Department for Business, Energy & Industrial Strategy, Oct, 2021 (Excel data)

Trends In Small Business Growth

Covid had the biggest negative impact on the self employed workforce.

The number of people registered as self-employed dropped by a huge 8.6% in 2021 compared to 2020 after increasing 93.9% in the previous 20 years.

Within the non-employers category it was those classed as ‘unregistered’ that accounted for all of this reduction. There were 397, 200 (11.9%) fewer businesses in category in 2021 which includes businesses that are not registered for either VAT or PAYE.

Micro businesses (1-9 employees) was the only category that saw numbers grow during the 12 months until the start of 2021 with a further 5,300 being added

 

% change in UK business population in the private sector by number of employees (2000-2021)

Business population estimates for the UK and regions start 2021: statistical release (Excel data)

The Impact Of Covid On Small Businesses Has Been Unevenly Distributed Across The UK

As can be seen from the chart Covid had a huge impact on Northern Irish businesses. The latest set of 2021 data shows 16.5% (24,600) fewer businesses in Northern Ireland compared to 2020. 

Average turnover by business in Wales increased by an impressive 8.83% from 2019 to £452,847 in 2020, which was up from a low base as it was the second lowest after turnover in the South West at £412,941.

 

Average turnover by business dropped from the previous year in several regions. Northern Ireland saw a 9.61% decline in turnover by business – the largest drop of all regions, the East Midlands saw a drop of 8.8%, there was a 3.37% fall in the North East and a 2.9% decline in Scotland.

The average turnover per business in the UK as a whole was £795,788 in 2021, an annual increase of 9.5% but the total number of businesses was down 6.5%.

Average Small Business Turnover By Sector & Region

£ 0 Trillion
Total turnover of private sector businesses in 2021
£ 0
Average turnover of businesses in the UK in 2021 (up 9% on 2020)
0 x
Difference in turnover between London and North East (£1.3 Trillion vs £85 billion).
0%
Proportion of total private sector turnover generated by businesses with SMEs with less than 250 employees
0%
Proportion of total private sector turnover generated by businesses with SMEs with less than 250 employees
0%
Proportion of total UK private sector turnover generated by England
Fewer businesses are reporting a reduction in turnover

The monthly Business Impact of Coronavirus Survey (BICS) continues to indicate few business are experiencing a reduction in turnover each month. As would be expected businesses in the services and hospitality sectors have seen the greatest improvements in turnover. 

In November 2021 44.3% of businesses in the arts entertainment and recreation sector and 48.3% of other service businesses are still reporting lower than expected turnover for this time of year. 

38.5% businesses in the accommodation and food service activities reported a reduction in turnover compared with normal expectations for this time of year. This is obviously an awfully high amount but significantly better than the 57.8% reported in Jan 2021. 

51% of businesses reported no effect to turnover compared with normal expectations for this time of year.

Only 7% of businesses reported an increase in turnover compared with normal expectations.

 

% of businesses reporting a reduction in turnover Jan ’21 vs Nov’ 21

The Business Impact of Coronavirus Survey (BICS) is a monthly survey thay asks trading businesses how COVID-19 has affected their turnover and profits compared with normal expectations for this time of year. The November 2021 received responses from 8,884 SME’s. 

ONS: Business insights and impact on the UK economy

Pubslished 18 November 2021

0%
of businesses currently trading reported a decrease in turnover compared with normal expectations for this time of year (Nov '21)
0%
SMEs (0 -249 employees) generated 52% of the estimated total turnover of UK businesses in 2020.
0%
Businesses in London have an average turnover that is 51.2% higher than the UK average (£1,102,958 vs £726,855).

New Small Businesses Creations vs Closures

The effect of Covid-19 on business closures has been significant

You can see from the chart on the right that a high number of small businesses closed for good in 2021. 

24,960 more businesses closed than opened in Q2 & Q3 2021.

Q1 also saw a higher than normal spike of new business openings at the start of 2021 with 136,765 new businesses added to the Inter-Departmental Business Register. 

 

Business Confidence

0%
of businesses reported no or low confidence that they would survive the next 3 months (Nov '21)
0%
reported turnover has decreased from Jun 2020 to Nov 2021
0%
of trading businesses have cash reserves of 3 months or less (nov '21)
Business confidence is continuing to rise

53.8% of the 8,884 surveyed in November 2021 have a high confidence they will survive into Q2 2022.

That number does not seem that high but it should be noted that in January 2021 only 37.4% of businesses thought they may survive the next 3 months.

Just 6.1% of businesses of low or no confidence they will survive the next 3 months which is much improved on the 15.1% at the start of the year.

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May 2019 – First edition published

May 2020 – Second edition published

Sept 2020 – Updated some ONS data

April 2021 – Updated all data and remove business funding data to a separate report. 

Dec 2021 – Updated all previous data and charts. Added additional ONS survey data. 

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