UK’s entrepreneurial ambitions stronger than ever as small business growth outpaces larger companiesJune 9, 2023 | Manchester, UK
- The number of small businesses in the UK is growing, bucking a trend where the UK’s larger business population has plateaued in recent years
- Number of micro businesses (0-9 employees) in the UK has grown every year in the last decade
- But small businesses need more support to boost UK economic growth: businesswoman and activist Mary Portas says it’s 'one of the most challenging times to be a small business owner' with action needed from government and industry to support UK entrepreneurs
The UK’s entrepreneurial ambitions are stronger than ever, as new analysis by Mastercard and Opinium shows that the number of micro businesses (0-9 employees) set up in the UK has grown every year in the last decade. Small businesses are bucking a trend where the UK’s medium and large business population has plateaued in recent years.
Overall, the number of medium and large businesses in the UK plateaued in 2022. But the number of micro and small businesses in the UK grew to 1.4 million in 2022, up 31,000 on the previous year. Growth in the number of medium and large businesses in the UK has yet to return to the highest levels seen in 2020*.
The UK’s smallest businesses are the least optimistic about their future performance, compared to medium and large businesses. Less than a quarter (23.9%) of businesses with 10 or fewer employees expect their performance to increase in the next 12 months. Those with 10 to 49 employees were also pessimistic, with only a third (33.7%) expecting their performance to improve.
In comparison, 43% of businesses with between 100 and 249 employees were optimistic about their future and expected their performance to increase in the next 12 months.**
Of all sectors, retailers were one of the least likely to have registered a strong performance last year, with only 15.3% saying they’d seen an increase in their performance in the year up to April 2023. This is despite being the sector employing the most people and having the largest turnover.
Mastercard’s UK&I President, Kelly Devine, said: “Small businesses are the UK’s economic powerhouse: they make up nearly 99% of all businesses, half of all business turnover, and employ two thirds of the working population. There’s no shortage of entrepreneurial ambition in the UK, but it’s worrying that their optimism lags behind big businesses. If we’re to boost growth, it’s vital that big business and government support small companies with skills, funding and policy so they can reach their potential.”
To help support small businesses and raise awareness of their contribution to local economies, Mastercard is hosting Thrive Street – a pop-up high street – in Manchester’s Arndale Centre until Monday 12th June, giving small businesses free retail space in the city centre and hosting masterclasses to help their business grow and thrive.
Businesswoman and activist Mary Portas said: “Small businesses really are the lifeblood of our economy. They’re innovative, creative, resilient. And despite the fact it’s one of the most challenging times to be a small business owner, their numbers are growing. People’s desire and appetite for what they do has also never been greater.
‘Yes. We know it continues to be an unpredictable world right now. But when you’re small and nimble it’s an opportunity to out manoeuvre the bigger players. Small business owners never fail to inspire me with their desire to do better, learn and flex themselves in the ever-evolving landscape of today’s business.”
Shadow Minister for Business and Industry, Bill Esterson MP, said: “The true entrepreneurial spirit of the UK is embodied by its small businesses. As the world’s first industrial city, it’s fitting that Manchester is now home to so many start-ups, and it was great to speak to the businesses at Mastercard’s Thrive Street that are adding so much to our communities.
“It’s vital that we improve the support for entrepreneurs who want to grow and that is exactly what The Labour Party is doing through its partnership with businesses.”
Thrive Street is part of Mastercard’s Strive UK programme, which helps small businesses by providing free access to training and targeted advice to tackle business challenges, like setting up an online shop, managing cashflow and creating a social media strategy.
Businesses also have access to experienced entrepreneurs and boards to help them grow their business and strengthen their resilience. Strive UK has supported more than half a million businesses to date and works with Enterprise Nation, Digital Boost and Be the Business to provide support.
About Mastercard (UK)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.