Today, we’re joining in the celebration of World Micro, Small, and Medium-sized Enterprises (MSME) Day.
First declared by the United Nations in 2017, MSME Day shines a light on the global resilience, creativity, and hard work of small business owners and entrepreneurs. Often described as the backbone of our business community, they’re the heart and soul of our cities, towns and villages, driving innovation, creating jobs, and building vibrant, connected communities. Small business are bigger than you think.
SMEs and the economy
At the start of 2023 there were 5.6 million small businesses (with 0 to 49 employees), 99.2% of the total business population.
MSMEs account for three-fifths of the employment and around half of turnover in the UK private sector.
Total employment in MSMEs was 16.7 million (61% of the total), whilst turnover was estimated at £2.4 trillion (53%).
Employment in small businesses (with 0 to 49 employees) was 13.1 million (48% of the total), with a turnover of £1.6 trillion (36%).
Composition of the business population
In 2023, there were estimated to be 5.6 million UK private sector businesses.
1.4 million of these had employees and 4.1 million had no employees.
The UK private sector business population is made up of 3.1 million sole proprietorships (56% of the total), 2.1 million actively trading companies (37%) and 365,000 ordinary partnerships (7%) in 2023.
2.6 million private sector businesses are registered for VAT or PAYE, 48% of the estimated total population.
Locations and industries
16% of all MSMEs were operating in Construction, compared with less than 1% in the Mining, Quarrying and Utilities sector.
Professional, Scientific and Technical Activities accounted for 14% of all MSMEs, while 10% were in the Wholesale and Retail Trade and Repair sector.
London (1 million) and the South East (852,000) had the most private sector businesses, accounting for 34% of the UK business population, while the North East had 156,000 private sector businesses, the fewest of any English region.
Between 2022 and 2023 the number of private sector businesses increased by 95,000 in England and by 300 in Wales, whilst numbers decreased in both Scotland (43,000) and Northern Ireland (6,000).
The North-West was the English region with the largest numeric increase (32,000), followed by the East of England (26,000), whilst the largest percentage increase was also in the North-West (6%). Business numbers decreased in the South-West by 13,000 (2%).
Figures obtained from the Department for Business and Trade
Support your local small businesses
As we celebrate World MSME Day, it’s important to acknowledge the challenges and opportunities that lie ahead for small businesses. According to the Federation of Small Businesses, late payment is still the number one issue faced by small businesses.
When a small business is paid promptly, there is certainty, which gives them the confidence to invest and grow. When they are waiting to get paid it has the opposite effect, causing them to think about not investing and shrinking not growing.
Continued support to bring an end to the scourge of late payment is needed from government, industry, and the community. Having a healthy cashflow is a key ingredient in helping MSME’s thrive and continue to drive innovation and growth.
For more information on World MSME Day visit the United Nations website.
To find out more about the work of Good Business Pays, visit our website at www.goodbusinesspays.com.