Understand the state of UK SMEs with these 13 stats
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The past couple of years for small and medium-sized enterprises (SMEs) have been… difficult.
A global pandemic, a cost-of-living crisis, and a recession (to name but a few) have all had an impact in helping make the lives of SMEs just that much harder than it usually is.
As a digital marketing agency, Embryo has helped shoulder this burden with the variety of SME’s that we work with, by helping develop solutions specific to both the business and the climate we’re operating with.
This means that we have to keep our finger on the pulse, particularly with regard to maintaining a keen understanding of the emerging trends that are impacting SMEs.
Throughout this blog, we’re going to talk about 13 stats that are impacting UK SMEs most acutely, with an emphasis on any statistics that are recent and reflect the current state of play for SMEs around the UK.
So if you’re an SME in need of digital marketing experts to help guide your business through the problems your business is currently facing, talk to us today.
Key SME Statistics For 2024
- There are currently 5.51 million small businesses in the UK, indicating that there are plenty of viable ventures for entrepreneurs.
On average, almost 20% of new businesses fail in their first year. Thorough market research, dedicated financial planning, and adaptability will be key for SMEs to overcome these initial challenges in 2024. - Around 50% of small businesses began their businesses from home, highlighting the positive impact ecommerce and digital marketing has had in allowing small businesses to grow.
- 33% of SMEs will need to apply for finance within a year to survive, showing that getting through the first year or so is difficult for businesses regardless of the current market conditions.
- In 2023, 42% of Small Businesses cited pricing and profitability as the main concern that’s impacting their business, which may reflect the current climate which has been impacted by rising inflation and a cost-of-living crisis.
- SMEs account for three-fifths (61%) of employment in the UK, highlighting the great impact SMEs have both on the overall economy and options for employability for those seeking work in the UK.
Consumer Trends
- 57% of consumers stated that they prefer to spend their money with SMEs because they want their money to be spent within the community.
- 45% Of those who prefer to shop with small businesses do so both online and offline, proving the benefits of having a business that’s available to a wide array of consumers.
Challenges For SME’s
- 45% of SMEs struggled to hire skilled workers in 2023, hinting at potential continued challenges in talent acquisition.
- 60% of SMEs faced hurdles in adapting to new trading regulations, which is likely to be a hangover from Brexit and the accompanying changes to rules and regulations affecting UK businesses.
- 65% of UK consumers prefer purchasing from businesses with strong environmental commitments, which may mean that SMEs may have to lean more into making their business environmentally friendly if they want to secure long-term growth and success.
- Approximately 316,310 UK enterprises ceased operations in 2023, which is an 11% business death rate. While at first glance this may sound catastrophic, it does show the overwhelming majority of businesses (89%) at least make it through their first year of operations.
Conclusion: The SME landscape remains mixed
The landscape for SMEs is a bit of a mixed bag, though nothing that I’d say is too unpredictable.
There are more than enough SMEs currently operating in the UK to suggest that there are continued opportunities out there for bidding entrepreneurs, and the vast majority of businesses are successful enough to survive at least their first year of operations.
Continued problems for SMEs are largely economic and political, with the impact of Brexit and a cost-of-living crisis still reverberating around the minds of businesses and consumers alike.
SMEs will likely have a lower level of resistance against exogenous shocks such as inflation, pandemics, and any other variable that leads to consumers being less likely to dispense with their money than their larger business counterparts.
This leads to around 1/3rd of small businesses seeking financial aid within their first years. However, with SMEs accounting for well over half of employment within the UK, it’s important for everyone that these businesses do get their assistance to help futureproof the economy.
And while just under half of SMEs state that they struggled to hire skilled workers in 2023, this needn’t be a problem for SMEs looking to develop their digital marketing side of the business. Embryo has more than enough experience across a variety of industries with businesses both big and small to help make sure that you see the progression and growth needed to maximise your business’s potential for growth.
If you would like to learn more about anything we discuss in this blog, or anything else related to digital marketing, you can speak to a member of our team
Sources (Myos, Startups, Forbes, Londonlovesbusiness, Takepayments, Market-inspector, Finder, Cottonsgroup, Payrow, Clearbusiness)
