Entrepreneurial ambitions in the UK are stronger than ever, analysis by Mastercard and Opinium suggests. As the number of micro-businesses (comprising one to nine employees) set up in the UK grew every year in the last decade, small business growth also outpaced that of larger companies.
While the number of medium and large businesses in the UK plateaued in 2022, the number of micro and small businesses in the UK grew to 1.4 million that year, 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.
Despite this average growth, the UK’s smallest businesses appear the least optimistic about their future performance. Less than a quarter (23.9 per cent) of businesses with fewer than ten employees expect their performance to increase in the next 12 months.
Meanwhile, those with ten to 49 employees were also pessimistic, with only a third (33.7 per cent) expecting their performance to improve. In comparison, 43 per cent 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 strong performance last year, with only 15.3 per cent 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 enjoying the largest turnover.
Kelly Devin, Mastercard’s UK and Ireland president, discussed the findings: “Small businesses are the UK’s economic powerhouse: they make up nearly 99 per cent 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.”
Setting up ‘Thrive Street’
In an effort to support small businesses and raise awareness of their contribution to local economies, Mastercard is hosting ‘Thrive Street‘. The pop-up high street will reside in Manchester’s Arndale Centre until Monday 12 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, and 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 outmanoeuvre 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.”
Bill Esterson MP, Shadow Minister for Business and Industry, also discussed the growth trends in the UK: ”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.”