"Lies, damned lies, and statistics", a quote attributed to Mark Twain, pretty much sums up the view of many people about statistics. We can become cynical about the persuasive use of numbers, because it can seem that they are just spinned different ways to support whichever point of view is being presented at the time.
However, statistics can be helpful and today we want to cover a few that we think will be encouraging to you as a small business owner. The House of Commons has a very helpful briefing page for topics of interest to small businesses. It highlights some of the current parliamentary material available about small businesses, including select committee reports, briefing papers on current legislation and information about other subjects produced by the parliamentary research services.
In December 2015 this page featured the latest Briefing Paper on Business Statistics. We want to share some of these with you here and explore how these are relevant to you as a small business owner.
Eight of the main statistics highlighted by the report are below. Underneath each one we have included a few of our thoughts as to how these are important to you as a small business owner:
- In 2015, there were 5.4 million businesses in the UK. Your business is one of these 5.4 million! You may not yet be as large or as well-established as some other businesses but your business DOES count: you ARE making a difference.
- Over 99% of businesses are Small or Medium Sized businesses – employing 0-249 people. This should be an encouragement to you. Whilst being one of 5.4 million can be a little daunting, to know that 99% of this number have no more than 249 people is a little less intimidating. Yes, there are the major corporates out there but most UK businesses are not in that category.
- 1 million (95%) businesses were micro-businesses – employing 0-9 people. Micro-businesses accounted for 33% of employment and 18% of turnover.Even better news. Not only are you in the 99% of businesses with 249 people or less but you may well also be in the 95% of businesses with 0-9 people! So never feel inadequate as a business man or woman just because your business is very small. MOST BUSINESSES ARE!!
- In London, there were 1,434 businesses per 10,000 resident adults. In the North East there were 629 per 10,000 resident adults. If you are a London-based small, medium or micro business you should never feel alone. This statistic shows that there are over twice as many business in London than elsewhere in the country. Running a small business can often feel very isolated but if you are in London you are in the best place to succeed!
- The service industries accounted for 74% of businesses, 79% of employment and 71% of turnover. Most businesses are service-oriented and you should therefore never feel that you are not running a “proper” business because you don’t produce anything. It can be easy to run out of steam when you are offering a service, especially if it is in some way a niche business, but your company is in good company!
- The manufacturing sector accounted for 5% of businesses, 10% of employment and 16% of turnover. If your business is manufacturing, than you are in a minority in terms of business sector but this gives you a chance to shine! The percentage of turnover produced by manufacturing companies is much higher than other sectors so set your sights high: if you have an innovative product that can meet an existing or emerging demand then the world is your oyster!
- There were 351,000 business births and 246,000 business deaths in 2014. This is a depressing statistic because many small business do fail. According to the last Office of National Statistics study into the area only 45% of small business startups survive beyond five years, whilst a recent study by the insurer RSA suggests that since the recession 55% will fail to make their fifth birthday. Make sure your business is not one of these! Be sure to read our next article that explores some of the potential reasons that small businesses do fail.
- 20% of SMEs are female led, and in October 2015 it was announced that 26% of FTSE100 board members were female. Good news not just for women but for all of us! At Fair Business Loans we believe passionately in fairness in all aspects of business, from funding for small businesses to fair and diverse demographic representation amongst small business owners and leaders. We believe that full business potential can only be fulfilled if every single member of the business is given the freedom to be themselves, do things their way, and achieve everything that they are capable of doing.
You may still class statistics in the same category as lies and damned lies, but as you can tell from our observations, we can see a lot of positive messages in the above statistics. Whatever type of small business you run and whatever stage of development it is at, you can be confident that you are not “just a number”. Your business is unique and valuable and has every right to feature in the above statistics as it goes from strength to strength during 2016.