New analysis reveals the importance of SMEs to the British economy

NEW research reveals how important small and medium enterprises are for the British economy, as businesses that employ between 1 and 249 employees contribute more than £2 trillion in turnover and employ 44% of the British workforce.

The study by marketing training hub School of Marketing analysed the latest ONS and Government data on the number of small and medium enterprises in 2021 to see which Regions and industries are powered the most by SMEs.

Analysis of the industries revealed that the Hospitality Industry has the highest proportion of SMEs out of any industry. Out of the 200,645 businesses operating in the industry, 140,050 are small or medium-sized, which equals roughly 69.8%. The Hospitality Industry is made up of accommodation and food services including hotels and restaurants.

The industry with the 2nd highest percentage of SMEs is Wholesale and Retail Trade. This industry, which also includes mechanic shops that repair motor vehicles and motorcycles, has more than 500,000 businesses, and more than 4 in 10 (43%) are small or medium sized.

Real Estate Industry has the 3rd highest proportion of SMEs, with 35.4% of all enterprises having below 250 employees. The industry has 134,095 businesses operating in the UK, and 47,740 are small or medium sized.

In 4th is the Agriculture, Forestry and Fishing Industry, which has more than 150,000 businesses running in the country, and roughly 50,000 (33%) are SMEs.

The industry counting the 5th highest percentage of SMEs is Manufacturing, with 32% of the enterprises operating in this industry being small or medium sized, which is 87,210 out of the 270,000 businesses.

The study also analysed each UK Region and found that Northern Ireland has the highest proportion of SMEs in the UK. 123,705 businesses are operating in Northern Ireland, and 36,369 are small or medium enterprises, making up roughly 29.4% of all companies.

Scotland has the 2nd highest percentage of SMEs out of all the UK Regions, with 27.7% of all businesses being SMEs. There are 342,045 companies in Scotland, and 94,746 have fewer than 250 employees.

The East Midlands is home to the 3rd highest proportion of SMEs, with 100,300 SMEs, making up 27.3% of the 367,400 businesses operating in the Region.

North West England has the 4th highest percentage of SMEs in the UK, with 26.7% of businesses operating in the area being small or medium sized.

Wales is tied for fourth, as 26.7% of operating businesses in the country are SMEs. 55,373 out of the 207,390 enterprises in Wales have fewer than 250 employees.

The study also assessed the most in demand skills for entry level positions across a range of industries and found that Communication and Microsoft Office proficiency are the most commonly occurring skills on job adverts; both appear in 61% of the jobs that were analysed. The 3rd most in demand skill is a High Attention to Detail, appearing in 44% of ads for entry-level positions. Finishing off the top 5 is a tie for fourth between Time-Management and Self Motivated, both showing up on 39% of job adverts.

Commenting on the findings, Ritchie Mehta, CEO of School of Marketing said:- "There are more than 1.4 million British companies which employ between 1 and 249 people, and combined they turn over a massive £2 trillion every year, which is 45% of total turnover from UK businesses. It's essential that they are not only given the support to grow and continue making such an important contribution, but also that there is a skilled workforce able to help them deliver and adapt to the demands of an evolving economy. This data shows that when it comes to skills, there are some common themes that employers are looking for across a range of jobs, however in the current climate, budgets for training are likely to be cut, and the skills gap could widen. SME owners can take advantage of the Apprenticeship Levy scheme to bring in new staff or train current ones in digital and data-led programmes, with the vast majority of the training cost covered by the levy."

The study was conducted by the School of Marketing, which offers leading digital and data marketing apprenticeships.
 

FSB urges newly elected Councillors to help build a pro-small businesses environment in Liverpool City Region

THE Federation of Small Businesses (FSB) has written to Liverpool City Region's newly-elected Councillors urging them to work with us to build a local environment in which small businesses can thrive. FSB, which chairs the Liverpool City Region Business Group comprised of the leading national and local business membership organisations and key Combined Authority representatives, believes the interests of small firms must be at the heart of local decision making.

During the Covid Pandemic local and combined authorities worked closely with FSB and small firms; recently, FSB Merseyside and Cheshire has been working with LCR Combined Authority on establishing shared priorities, underpinned by evidence, to better support local start-ups and business growth. We believe continued partnership will be of even greater importance to help small businesses as they navigate an already tumultuous recovery.

FSB's new report:-'Local Leadership: How Local Authorities Can Support Small Businesses,' outlines the ways local and combined authorities across England can build on these new working relationships to empower small businesses and the self employed to deliver growth, prosperity and jobs.

The report covers a wide range of areas, including how Councils should best engage with their small business community, skills and digital connectivity, planning and business rates.

Councillors from:- Liverpool, Wirral, Sefton, Knowsley, Halton and St Helens, have been invited to become an FSB Local Leadership Partner.

The Partnership has 3 key pledges:-

1. Work with FSB to develop supportive policy for small businesses in Liverpool City Region, as set out in FSB's Local Leadership Report 2022.

2. Establish a culture of parity of focus between residents and the small businesses they work at/the small businesses at the heart of our community.

3. Create, or continue in the next term, the post of Small Business Champion (elected member) and single point of contact (officer) within each Council.

Small businesses are an integral part of the UK's local, Regional and national economies and communities; and they account for around 60% of the employment and around 50% of turnover in the private sector. In turn, Local Councils and Combined Authorities play a fundamental part in creating a thriving small business environment; from supporting small business during COVID challenges and empowering entrepreneurship in diverse communities, to leading the way in addressing current and future skills challenges.
 
FSB Merseyside and Cheshire Area Leader (Liverpool City Region) Michael Sandys said:- "Small businesses in Liverpool City Region are essential to growth and play a vital role in our economy and also local communities. We're asking newly elected Councillors to support the Leadership Partnership Pledge and place small businesses at the heart of enterprise and economic policy making at Combined Authority and local Council level. Our recommendations act as a checklist that can be used to ensure small firms are given the right support and encouragement to survive, compete and grow. FSB is committed to working with Local Authorities and individual Councillors to ensure this happens. There are so many challenges currently facing small businesses and the self employed. As well as sky high energy costs, increasing prices and labour supply challenges, businesses are trying to tackle issues such as skills gaps within their teams and debt acquired during the Pandemic. Throughout Covid and successive lockdowns, Liverpool City Region's small businesses stepped up and stepped in to help their communities. They are important members of the electorate, job creators and innovators who drive growth and prosperity. They deserve the best support environment possible, and that is what we want to work with local policymakers to achieve."