Whilst the national press mostly talks up big business and highlights world famous brand names, it may surprise many observers to learn that almost half of the UK’s business turnover comes from small and medium sized businesses. Just under 15 million people are employed by these businesses which have a collective turnover of £1.6 trillion.
The Department for Business, Innovation and Skills released information that confirmed the existence of 4.9 million individual businesses operating within the UK. From that vast collection of private businesses, 99 percent of them employ less than 250 people.
Digging a little deeper through the information released shows that half of businesses actually employ less than 50 people, yet make up to half of the private sector trade which is quite remarkable.
Vince Cable, the Business secretary, noted that many people will try out small business as a way to succeed, with new businesses particularly prominent up in the north west. Since 2010, the number of new businesses has increased more than 447,000, which shows an increase of 10 percent and perhaps suggests that Britain’s fortunes are improving.
Matt Hancock, the Enterprise minister, was keen to point out that there is a £2,000 new allowance for employers to use from next April which will effectively reduce the national insurance cost for each employee (employers’ national insurance, as opposed to employee national insurance). This tax move will essentially eliminate employer taxation for almost half a million businesses.
The UK government is encouraged by the small business successes and plans a publicity campaign in the autumn to highlight some notable wins. It is hoped this campaign will encourage other wannabe entrepreneurs to start their own businesses too.