Supporting small businesses: 5 facts you didn't know about small businesses and the UK economy

Small businesses are often called the backbone of the UK economy—and for good reason. They drive innovation, create diverse job opportunities, and enrich communities. Yet, their impact often flies under the radar. This blog sheds light on five compelling facts about small businesses and their significant contribution to the UK economy. Whether you’re a business owner, an aspiring entrepreneur, or simply a passionate advocate for local businesses, these insights will demonstrate why supporting small businesses matters now more than ever. 1. Small Businesses Employ Over Half of the UK Workforce Did you know that small and medium-sized enterprises (SMEs) make up over 99% of all UK businesses? Even more impressive, they collectively employ approximately 60% of the private sector workforce. That’s millions of people whose livelihoods depend on small businesses. From local coffee shops to innovative tech start-ups, these enterprises are the lifeblood of many families and communities. Take Lucy’s Artisan Bakery in Brighton, for example. Not only does Lucy’s employ talented local bakers, but it also supports regional farmers by sourcing ingredients sustainably. When you support a small business, you're helping to sustain jobs, skills, and opportunities in your area. 2. They Generate Over a Third of the UK’s Turnover Despite their modest size, SMEs contribute a staggering 36% of the UK’s total business turnover. This statistic highlights how small businesses punch well above their weight when it comes to driving economic growth and revenue. Take GreenSpark, a renewable energy consultancy based in Manchester. With a tight-knit team of fewer than 20 employees, the company helps businesses across the UK cut energy costs while achieving steady revenue growth. This type of influence underscores the importance of small businesses in fostering sustainable and impactful economic success. Supporting small businesses doesn’t just benefit owners—it strengthens the UK’s entire economic ecosystem. 3. Innovation Thrives in Small Businesses Many of today’s most exciting innovations are born in small businesses. SMEs are uniquely nimble, which allows them to pivot quickly, take risks, and think outside the box—qualities that larger, more rigid organisations sometimes lack. For instance, consider Eco-Pal, a London-based start-up that's taking the sustainability space by storm. Its biodegradable packaging, made from seaweed, is gaining international recognition and reshaping how businesses think about single-use materials. By supporting small businesses like Eco-Pal, you’re encouraging innovation that solves real-world problems while building a sustainable future. 4. Small Businesses Are Key to Local Economies Have you heard of the “local multiplier effect”? It means that money spent at local businesses stays within the community, boosting the local economy. Studies show that every £1 spent at a small business generates 63p of additional local economic activity, compared to just 40p when spent at a larger chain. Take Sarah’s Bookshop in York, a charming independent bookstore that goes beyond selling novels. Sarah hosts popular book clubs, local author signings, and poetry readings, creating a true sense of community. Choosing small businesses over high street chains isn’t just a way to find unique products—it’s a meaningful investment in your neighbourhood’s growth and culture. 5. Small Businesses Drive Diversity and Inclusion SMEs are often trailblazers when it comes to promoting diversity and inclusion. Their smaller, more dynamic environments are better suited to accommodating flexible working arrangements, recruiting locally, and supporting underrepresented groups. A standout example is Birmingham’s Unity Design Studio, led by a diverse team that collaborates with local artists from different cultural backgrounds. Their projects celebrate inclusivity while fostering creative connections in the community. By choosing to support inclusive small businesses, you’re fostering cultural diversity and helping create a more equitable society. Why Supporting Small Businesses Matters From generating millions of jobs to fostering innovation and community spirit, the facts speak for themselves—small businesses are the bedrock of the UK economy. But their continued success depends on collective support. Here’s how you can make an impact today:Shop Locally: Choose small, independent businesses for your shopping needs. Spread the Word: Share your favourite local businesses online or with friends. Collaborate: Seek out independent service providers for your projects. At Virtue Accountants, we are proud to support SMEs with tailored financial solutions. From bookkeeping to tax planning, our online and remote services are designed to help small businesses thrive in a competitive marketplace. Whether you're a sole trader, an online business, or a limited company, we’re here to make your accounting stress-free and efficient. Contact us today to learn how we can help your business flourish.