The smallest businesses drive growth
The freelancer and 'one-man-band' business models are driving the rise of new businesses in the UK according to latest figures from the Government.
The statistics from the Department for Business, Innovation and Skills (BIS) show that there were an estimated 4.9 million private sector businesses in the UK at the start of 2013, an increase of 102,000 compared to the start of 2012. This continues the trend of steady growth in the UK business population since the series began in 2000, with the 2013 estimate being the highest.
However, the indication is clear that, as in previous years, the latest rise has been driven by the growth in the numbers of smaller, non-employing businesses – there were 127,000 more of these than at the start of 2013. This growth was offset by the number of employing businesses falling by 26,000.
The vast majority, 99.9 per cent of private sector businesses, are SMEs, employing an estimated 14.4 million people, 59.3 per cent of private sector employment. Their estimated combined annual turnover of £1,600 billion accounted for 48.1 per cent of private sector turnover.
ACCA (the Association of Chartered Certified Accountants) response to BIS figures which show the number of private sector businesses reaching a record high of 4.9 million.
Rosana Mirkovic, head of SME policy at the Association of Chartered Certified Accountants said: "It is good news that the UK is becoming fertile ground for new, small businesses. However, survival and growth of those small businesses is essential for these figures to really count towards the UK's recovery.
"Our own research shows the kinds of obstacles UK small enterprises are facing as we emerge from the recession, with late payment problems and skills shortages remaining a major issue for the UK's entrepreneurial community, so we are not out of the woods yet. Right now SMEs need to consider a new approach, prioritising investment and seeking internationally focused market growth, as they prepare for a more stable economy."