UK Small Business Closure Report 2017
We surveyed over 500 small business owners (businesses with 0-49 employees) to find out if, when and how they plan to exit their business, along with their attitudes towards the upcoming General Election.
The Small Business Closure Report 2017 reflects the feelings and attitudes within the UK’s small business owners, and how they view the UK’s business landscape.
Making up 99.3% of all businesses in the UK, small businesses are essential to the country’s economy. We found that small businesses (those with 0-49 employees):
- Small Businesses employ on average 4.85 people
- 424,000 small business owners plan on selling within the next five years
- 370,000 small businesses plan on ceasing trading in the next 5 years
- 1.8 million jobs could be lost in next 5 years
- 370,000 jobs could be lost in the next 12 months
- Employ on average 4.01 people
- 363,000 small businesses plan on ceasing trading in 5 years
- 1.4 million jobs could be lost in 5 years
- 510,000 small business owners plan to sell in the next 5 years
- 529,000 jobs could be at risk in the next 12 months
- Small businesses in North East most likely to be considering an exit
- Small businesses in West Midlands least likely to be considering exit
- Small businesses in Yorkshire and Humberside had lowest average turnover
- Small businesses in London had the highest average turnover
- Business owners in the South East are the most likely to vote Conservative
- Business owners in the North East are most likely to vote Labour
The average UK business
Using our responses, we created a picture of what the average UK small business looks like. We found that the average small business has a revenue of £167,062 per year, employs 4.01 people, voted Conservative at the last election, and will vote Conservative again at this election. 22% of small business owners are looking to exit in the next five years, with 8% of those wanting to leave in the next 12 months.
Breaking it down further, we’ve found that:
- Sole Traders have an average turnover of £37,981
- Micro business (those who employ 1 – 9 people) have an average turnover of £207,343
- Small businesses (those with 10 - 49 employees) have an average turnover of £251,249
The UK by Region
The UK’s business landscape is diverse, and average earnings and number of employees change significantly between region.
We found that there’s a gap of £184,159 between the highest and lowest-performing regions – London has an average of £252,107 whilst Yorkshire and Humberside has an average of just £67,948. The two have very different levels of staffing, with businesses in London employing an average of 5.75 people compared to Yorkshire’s 2.12.
Whilst closing a business is one way to exit, there’s other options. Owners can sell a business, pass it on to family or transfer it any number of other ways.
We found that when the time comes, over half the respondents planned to close their business, whilst just 17% planned to sell. The full breakdown was:
- 55% of people plan to just close the business down
- 17% plan to sell their business
- 13% of people don’t know how they’ll exit their business
- 12% plan to pass their business onto a family member
- 3% other
With the General Election drawing closer, we asked small business owners which way they plan to vote. We found that the small business vote is leaning towards Conservative, though not nearly as much as the rest of the nation.
Whilst 37% of small business owners plan to vote Conservative, the national average is far higher at 49% - showing that although they’re the favourite, small business owners still feel that there’s more the party should be doing to help small business.
Labour was closer, but still below the average. 19% of small business owners plan to vote Labour, compared to the national average of 26% of the UK.
As well as how business owners intend to vote in this General Election, we also asked how they voted at the previous election to find out if voting habits changed.
We found that Labour was the main loser out of the top three parties, losing support which has gone to the Conservative party:
- 37% - Conservative (up 2%)
- 19% - Labour (down 2%)
- 11% - Liberal Democrat (up 2%)
- 8% - UKIP (down 5%)
- 3% - Green (down 2%)
- 2% - SNP (down 1%)
- 1% - Plaid Cymru (unchanged)
- 5% - Would not vote (down 5%)
- 14% - Don’t know /would not vote/other
Bizdaq, the online marketplace for selling or buying a small business, is dedicated to making the process of selling a business easier and more cost effective for small business owners. Bizdaq features include an online valuation tool that instantly estimates the likely sale value of any business, step-by-step instructions and notifications to help business sellers and buyers through the business transfer process for themselves. This report is part of Bizdaq’s mission to increase the number of small business owners successfully selling their business and thus avoiding a sudden closure when the business is no longer viable, saving jobs and enabling business owners to realise the value of their hard work.