By September 21, 2015 0 Comments Read More →

Businesses reach new heights in the UK

By Itrat Bashir

Starting a new business is a daunting prospect for any person thinking of setting up a new venture. But, the recent figures compiled by the House of Commons Library (published on May 28, 2015) will give encouragement and confidence to newcomers.

As per the report ‘Business Statistics’, in 2014 the number of business entities hit a record high in the United Kingdom and for the first time crossed the figure of five million. The UK recorded 5.2 million businesses, a jump of 330,000 (7 percent) from 2013, of which, 99 percent were small and medium sized businesses. Although there has been a gradual growth in businesses since 2000, the last time a significant jump of seven percent was witnessed was way back in 2004.

Interestingly, micro-businesses propelled the growth in Britain. Five million (96 percent) businesses were micro-businesses (that employ a maximum of nine people). These businesses accounted for 33 percent of employment and 19 percent of turnover.

The report also suggested that since 2000, a visible increase was seen in sole proprietorship (businesses with no employees); in fact it has grown faster than any other business. In the span of 14 years, such businesses have shown an impressive growth of 68 percent in comparison to 51 percent growth in the total number of businesses.

A bulk of the growth remained in the service sector, which accounted for 73 percent of the number of businesses. As businesses in this category generate employment, it’s a welcomed result, with this sector alone accounting for 79 percent of employment in the UK.

These figures may look very impressive, but the survival rate of businesses is a crucial factor that draws the true picture of business activity in the UK. The death rate figures for businesses in the report (which only quotes up to 2013), again, is promising. A decline of one percent was seen in the closures of businesses during that period. In 2013, 346,000 new businesses were opened, from which 238,000 businesses closed down, and thus 108,000 new businesses managed to remain afloat.

Female entrepreneurs also made their presence felt; 2014’s business activities and the latest figures should give confidence to women thinking of launching their own venture. The report revealed that 20 percent of small and medium enterprises (SMEs) were led by females, ‘this is two percentage points higher than 2012 and equates to around 1.1 million SMEs’.

“It is estimated that in the UK women-led SME businesses contribute about 75,000 pounds to the economic output (16 percent of the UK approximate Gross Value Added total),” stated the report.

The government sees it as very positive. A government spokesperson told ‘Choices Magazine’ that the UK is now ranked as the most entrepreneurial economy in Europe and fourth in the world.

When asked what is the future for small businesses in the UK in the next 5 years, she said this government continues to back small businesses by helping hard working people get the opportunities they need to succeed.

“The Enterprise Bill will make sure the UK continues to be the best place in Europe to do business by setting up a Small Business Commissioner, to help small firms handle disputes over payment issues, and including the actions of independent regulators in the £10 billion cutting red tape target. Making advice more easily available through the Business Support Helpline and Business Growth Service, cutting corporation tax from 20 percent to 18 percent by 2020 and doubling small business rate relief until April 2016 is all part of our aim to make the UK the best place to start and grow a business in the world.”

These stats and the government’s optimism should draw the attention of people dreaming of becoming their ‘own-boss’. The figures are promising and a morale booster for the people intending or thinking about starting their own business.

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