37 UK small business statistics for 2025

Small businesses are powering the UK – the numbers prove it.

We’ve brought together 37 statistics that explain what it’s like to run a small business in the UK in 2025. If you want to know about AI, international trade, or hiring trends for 2025, this is the place for you.

The last few years have proven that the small business community is hugely resilient, rising to meet everything the world throws at them. And now they’re rising to meet the world’s opportunities, as well as challenges.

If you’ve got international customers and suppliers, we built our business account for you. It’ll help you earn back wasted time and money, saving on bank queues, paperwork, and fees. All of which you can invest in growing your business without borders.

The UK small business landscape

1. There are 5.5 million private-sector businesses in the UK

As of January 2024, there were 5.5 million businesses in the UK. That’s a drop of 1% from the year before, but there’s important context to this.

Business numbers peaked at 6 million in 2020, but are down 8.1% on that record. Since that peak, the business population has hovered between 5.5 and 5.6 million.

This drop is part of the natural ebb and flow, not a warning sign. Nobody’s surprised by the tide going in and out – this is the equivalent for business numbers.

2. Small businesses make up 99% of all UK businesses

With 5.5 million businesses in the UK, there’s one for every 13 people. Remarkably, 99% (5.45 million) of them are defined as ‘small businesses’.

37,800 businesses are medium-sized and just 8,250 are considered large.

There are lots of ways to define business sizes, but for this stat it’s:

• Small = 0 to 49 employees

• Medium = 50 to 249 employees

• Large = 250 or more employees

3. Small businesses provide 46.7% of jobs in the UK

Small businesses are the engine of the UK economy, bringing in huge amounts of money and employing nearly half of the working population.

Combined, small and medium businesses (SMBs/SMEs) employ 59.9% of the workforce.

These businesses are vital to the economy in so many ways. The more support we can give them, the better it’ll be for everyone in the country.

4. SME turnover for 2024 was £2.8 trillion

Businesses in the UK earned £5.2 trillion in total in 2024. Small businesses were responsible for 34.6% of that.³

Combined, SMEs are responsible for more than half of the country’s turnover.

These businesses might be small, but their impact is anything but.

5. The UK business population has grown by 59% since 2000⁴

Zooming out to look at long-term trends, we’re in a golden age for entrepreneurs.

A key driver for this growth has been businesses with no employees. These sole traders or companies with sole proprietors far outstrip small, medium, and large businesses.

More and more people are going solo, starting businesses, and making a living on their own terms.

6. UK small business numbers have increased by 40% in 20 years

Back in 2004, there were 3.89 million small businesses operating in the UK. In the 20 years since, that number has climbed to 5.45 million.⁵

A great quirk is that, as a percentage of all businesses, small businesses have stayed the same. They were 99.1% of the total in 2004 and 99.1% in 2024.⁶

There’s no small business bubble. They’re foundational to how we do business in the UK.

7. 2016 had the highest number of business births (398,000)

Congratulations! It’s a beautiful baby… business?

The Office for National Statistics records business births and deaths. This is an important metric to track, as it’s a leading indicator of economic health and confidence each year.

While birth rates are traditionally above death rates, 2016 was the peak – 14.4% of the businesses active that year were newcomers.⁷

8. The business population last shrank in 2022

Since 2000, only three years have had the business death rate exceed the birth rate. 2022 was one of them.

2009 and 2010 were the last two negative growth years for new businesses.

2022 was ‌the peak for economic uncertainty – businesses were still reeling from the pandemic and repayments for its related loan schemes had started. On top of that, energy prices soared, war came to Europe, and interest rates skyrocketed with the mini-budget.⁸

In a year like that, it was no surprise to see an increase in closures. The good news is that growth has returned since then.

Business dynamics and growth

9. 39.4% of businesses born in 2018 are still trading today

The first two years are the hardest. Or three. Or five. Whatever version of the saying you prefer, the first few years for SMEs are crucial.

While the majority of businesses born in 2018 have closed, almost two out of five are trading today.

The nation’s SMEs are, arguably, still bouncing back from the difficult start to this decade. We can see this in the 6.8% drop in survival rates for the 2015 newborns vs. those in 2014.

This just reiterates how vital – and vulnerable – these early years are. Survival is a combination of good timing and great planning, reactions and acumen from the business owner.

10. 90% of SMEs grew their business in 2024

The vast majority of SMEs had a successful 2024, and by an impressive amount. The average reported growth of 27%.⁹

This is one of the most encouraging statistics we can think of. More growth means:

• More jobs

• More revenue

• More opportunities, at home and abroad

11. 88% of SMEs are optimistic about year-on-year performance in 2025¹⁰

Almost nine out of 10 SMEs are confident they’ll have a similar or better year vs. 2024.

Even more importantly, this optimism is tempered by an understanding of the near-term challenges they face. The two most-reported barriers to growth are increasing costs and the economic climate.

Still, you can’t keep a good business down. The majority of SMEs are looking up for 2025.¹¹

12. 85% of SMEs are confident about long-term growth

Five years is a long time in business – we’ve already seen how it’s long enough for the majority of new businesses to close.

For most of Britain’s SMEs, however, the future looks bright. Aviva polled 508 small business owners and found that 432 are confident their business will grow in the five years to 2030.¹²

Optimism and resilience show up time and time again in these statistics about UK SMEs.

13. 25% of SMEs plan to hire in 2025, 10% plan to cut jobs

Hiring is complicated for SMEs for lots of reasons. Scaling can be bumpy, finding the right fit is hard, and it marks a big financial commitment.

The overall hiring picture is positive for 2025. For every one SME that decreases its headcount in 2025, 2.5 will be hiring. This is good news for businesses, employment figures, and the economy as a whole.

SME workforce and skills

14. Confidence about staff retention has risen sharply among SMEs

Just 27% of businesses are concerned about retaining staff in 2025, a decrease of 32.5% since 2024 and 34.1% from 2023.

This can’t be attributed to a tougher hiring market, as we know that more SMEs plan to recruit than cut jobs this year (statistic 13). Even in a warmer job market, SMEs are confident they can keep staff in the building.

15. 70% of SMEs plan to upskill their workforce in 2025

This statistic comes with some interesting extras.

SMEs developing their in-house talent is great news, or it could reflect that 26% are struggling to recruit staff with the skills they need.

If they’re struggling to hire, is upskilling their alternative?

We don’t think so. Concerns about the quality of recruits are actually down 35% since 2023. It’s fair to say that the 2025 focus on upskilling reflects a real interest in developing talent.

16. Women lead only 15% of SMEs with employees

The number of female-led SMEs with employees dropped from 18% in 2022 to 15% in 2023.

For sole-proprietor businesses, the figure has stayed consistent – 18% are owned by women.

This is a major discrepancy with population numbers. There's a complex web of reasons for this, but some interesting data from YFM Equity Partners illustrates the problem. Twice as many women struggle to grow their business compared to men. Women are 13.1% more likely to struggle to access finance for their business.

17. Only 7% of the UK’s SMEs employers are run by someone from a minority ethnic group

Employers from a non-white background make up 7% of the SME population.

This number has stayed roughly the same since 2015. We’re not losing business owners from minority ethnic backgrounds, but nor are we gaining them.

With 18% of the population identifying as part of a minority ethnic group, more can be done to encourage business ownership in these communities.

SME challenges and concerns

18. 22% of SMEs say cash flow is their greatest challenge

If cash is king, it could be a little kinder to its citizens.

One in every five SME owners says managing cash flow is their most challenging task.

Small businesses can get the worst of both worlds. Bigger businesses in their supply chain can demand restrictive terms, while smaller businesses and individual customers can be unreliable or slow-moving.

Software integrations, quick and cost-effective transfers, and better expense management can all help. And, yet, the cash flow question gets even harder to answer when you consider the next statistic…

19. Nearly half of UK SMEs have an emergency fund below six months’ working capital

Worryingly, 41% of SMEs in the UK don’t have emergency funds and would struggle if a quiet period lasted more than six months.

In some ways, this isn’t surprising. We know that managing cash flow is hard for many SMEs, so they won’t likely have huge cash reserves.

Mental resilience alone can’t keep a business afloat. At some point, money talks loudest and SMEs need cash to continue operating.

20. Managing taxes is the most time-consuming task for a third of SMEs

Out of all the responsibilities of running an SME, taxes eat up the most time.

30% of small business owners say that tax admin dominates their calendar above other tasks. It leaves us wondering, how much time could they save by using embedded finance products?

21. 33% of SME owners take no more than two weeks of holiday a year

People often dream about being their own boss. Many of them don’t realise what harsh taskmasters they’ll be.

Even though they call the shots, a third of small business owners struggle to switch off – taking only a third of the legal minimum holiday that their staff enjoy.

There's some good news, though. Despite being in need of an all-inclusive fortnight away, 73% say starting a business is the best decision they’ve ever made.

SME investment and innovation

22. 44% of SMEs will invest in sustainability in 2025

Sustainability for businesses used to be about financial performance. In 2025, it’s got a much greener connection.

44% of business leaders will make sustainability investments this year, with 53% looking at alternative energy sources in light of rising costs and geopolitical uncertainty.

Combined with statistic 32 on this list, sustainability is clearly still high on the agenda for SMEs.

23. The top three investment priorities for SMEs in 2025

Many SMEs are approaching 2025 with a growth mindset, developing people, products and new technology in their businesses.

If there’s one type of tech that’s top of mind right now, it’s AI. Speaking of which…

24. 89% of leaders see AI as an opportunity for their SME

There’s a groundswell of interest in artificial intelligence among the SME community. Nearly nine in every 10 SME leaders believe AI presents opportunities for their business. 42% even have a senior figure responsible for AI within their business.

45% are already using generative AI in their workflows.

25. 7% of SMEs believe AI threatens their business

AI isn’t seen as a universal good, though. 7% of small business owners think AI has the potential to threaten their company.

Commonly reported concerns include increased competition, security threats, and ESG and reputational risks.

26. 21% of SMEs have a registered trademark; 28% a copyright

In total, 63% of SMEs use some kind of intellectual property right, from NDAs to patents.

For many businesses, legally securing the rights to use and be recognised as the owner of their work is a make-or-break moment.

One standout statistic is that 87% of early-stage startups don’t use any form of IP protection. Cost is regularly cited as a reason for not investing in IPR, which helps explain this choice.

SME distribution among regions and industries

27. 87% of the UK’s SMEs are registered in England

The UK’s business population is not evenly distributed, for one very simple reason. The vast majority of UK SMEs are registered in England.

Relative to the population, SME numbers across the UK are distributed roughly as you’d expect. England slightly outperforms its neighbours.

28. 21% of England’s SMEs are based in London

A nation’s capital is its heartbeat and leading light. It’s rare for it not to be the economic centre, too.

More than one in every five of England’s SMEs is based in the capital. The South East follows close behind with 19% of SMEs and the South West takes bronze with 11%.

The North East hosts the lowest percentage of England’s SMEs, at just 3% of the total. Its business population did grow at the second highest rate in England between 2023 and 2024, so there are positive signs everywhere.

Regional inequalities affect individuals and businesses alike. Escaping this trap is just one of the many reasons why more small businesses are trading internationally.

29. The top three SME industries? Construction; professional and technical activities; wholesale and retail

It’s hard to categorise industries and sectors, but one thing is clear: Our SMEs create things.

They build homes and infrastructure, make scientific, technological and creative advances and bring great new products to market. 

Together, the top three sectors make up 39.7% of the SME population.

The smallest single sector for SME activity is finance and insurance. Below that, the data gets grouped together into one big group of much smaller industries.

30. Over 30% of SME turnover came from wholesale and retail in 2024

One of the most successful industries for SMEs in 2024 was wholesale and retail. As well as selling goods, this category includes motor vehicle repairs.

It also provided an outsized impact on employment, accounting for 14% of SME jobs. Only construction SMEs employed a greater percentage of workers.

This is encouraging, given widely reported fears about imports and exports in the post-Brexit era. SMEs in this sector are clearly making smart choices, including more international trade.

Community and local impact

31. 75% of SMEs credit local community as important to their success

One of the best things about small businesses is their connection to their local area. Our high streets and town centres thrive with independent businesses. Run by people who care and want to see their area do well, these SMEs serve their community and get so much back from them, too.

Three-quarters of SMEs say their local community significantly contributes to their success.

The ability to have an impact locally and internationally is one of the most impressive things about SMEs.

32. 63% of SMEs say better local transport infrastructure will help them grow

SME owners think EV charging points and cycle lanes are going to be increasingly important to their staff. In fact, 41% say that adequate transport for their employees will be critical to their future success.

This is an interesting challenge, as much of it is outside their control. Some might be able to install bike racks or chargers on-site, but many need political action.

International expansion

33. 28% of SMEs aim to expand internationally in the next two years

The UK is a great place to start and grow a business, but there’s a big world beyond our borders. Growing SMEs know there’s much more business to be done in international markets. More than a quarter of Britain’s small businesses plan on making it happen.

56% of SMEs with international ambitions will prioritise North America, followed by Australia (21%), Germany (20%) and UAE (16%).

Those with a low-cost, streamlined multi-currency account will be best placed for success.

34. 47% of US businesses see the UK as their top market for trade

The USA is always ready to do business, and the UK can be a big beneficiary.

The only nation that ranks higher than the UK is Canada (at 50%). The longest border in the world vs. 2,000 miles of Atlantic Ocean, yet there’s just a three percentage point difference between us!

It’ll take more than a bit of water to stop the ‘land of opportunity’ reaching us.

Get ahead of the new gold rush with a USD business account.

35. Exports account for under half of sales for 73% of SMEs

While SMEs are eager to begin international expansion, the small businesses that are already exporting have their own room to grow.

Over three-quarters of exporters are still making the majority of their sales in the UK. This is no bad thing, but it also shows how much room remains for growth in international markets.

36. Over a third of SMEs are considering trading overseas

35% of our small businesses are interested in exporting their goods or services, but are being held up by several hurdles.

Over two-fifths of would-be exporters want help understanding the export process, while 37% want more information on their target market, and 34% would need some financial support.

The desire is there, but these businesses need support to make it their reality.

37. 18% of SMEs are already trading internationally

Almost a fifth of the UK’s small businesses are exporting goods and services globally. This is an impressive achievement, considering what it takes to get started.

The even better news is that 11% plan to increase their international activity in the year ahead.

How Airwallex can support SMEs

With an Airwallex business account, you can:

• Transfer to 150+ countries

• Accept payments from 180+ countries

• Open local currency accounts in 60 countries

• Integrate with other financial platforms, for complete visibility

• Convert your money at interbank rates, saving you from huge conversion fees

All without setting up local entities or wasting time on paperwork or long phone calls. We’re ready to walk with Britain’s SMEs on their path to growth. Let’s get moving.

Sources:

1: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release

2: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release

3: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release#composition-of-the-2024-business-population

4: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release

5: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf 

6: https://www.nimblefins.co.uk/business-insurance/small-business-insurance-uk/small-business-statistics-uk

7: https://www.gov.uk/government/statistics/business-population-estimates-2024 

8: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf 

https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/businessdemography/2023#business-birth-and-death-rates-2018-to-2023

9: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf 

https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/businessdemography/2023

10: https://assets.publishing.service.gov.uk/media/679201a1b1e4f5cbd3a34e37/SME_Skills_Horizon_2025.pdf 

11: https://www.fundingcircle.com/uk/resources/news/impact-report-small-business-growth/ 

12: https://www.bva-bdrc.com/wp-content/uploads/2024/09/SME-charts-Q2-2024-presentation-pack-FINAL.pdf 

12: https://www.aviva.com/newsroom/news-releases/2024/12/new-aviva-survey-reveals-smes-optimistic-about-2025-growth/

13: https://assets.publishing.service.gov.uk/media/66e95fc7c069f68b7681bc55/LSBS_2023_SME_employers_headline_statistics.pdf 

14: https://assets.publishing.service.gov.uk/media/679201a1b1e4f5cbd3a34e37/SME_Skills_Horizon_2025.pdf

https://assets.publishing.service.gov.uk/media/679201a1b1e4f5cbd3a34e37/SME_Skills_Horizon_2025.pdf

15: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf

https://ifamagazine.com/twice-as-many-women-than-men-struggle-to-grow-businesses-in-the-uk-research-from-yfm-equity-partners-shows/

16: https://www.gov.uk/government/collections/small-business-survey-reports#2023

https://www.ethnicity-facts-figures.service.gov.uk/

https://ifamagazine.com/twice-as-many-women-than-men-struggle-to-grow-businesses-in-the-uk-research-from-yfm-equity-partners-shows/

18: https://www.ethnicity-facts-figures.service.gov.uk

19: https://gosuperscript.com/news-and-resources/research-reveals-sme-challenges-2025/

20: https://gosuperscript.com/news-and-resources/research-reveals-sme-challenges-2025/ 

21: https://gosuperscript.com/news-and-resources/research-reveals-sme-challenges-2025/ 

22: https://kpmg.com/uk/en/home/insights/2025/02/kpmg-private-enterprise-barometer.html 

23: https://hrnews.co.uk/smes-are-prioritising-employee-wellbeing-over-product-development-and-tech-growth/ 

24: https://www.bgf.co.uk/insights/sme-ai-adoption/

25: https://www.bgf.co.uk/insights/sme-ai-adoption/

26: https://www.gov.uk/government/publications/ip-awareness-and-understanding-among-uk-smes/ip-awareness-and-understanding-among-uk-smes 

27: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release#uk-countries-and-the-regions 

https://assets.publishing.service.gov.uk/media/679201a1b1e4f5cbd3a34e37/SME_Skills_Horizon_2025.pdf

https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/annualmidyearpopulationestimates/mid2023 

28: https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf

https://www.gov.uk/government/statistics/business-population-estimates-2024 

https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release#uk-countries-and-the-regions

29: https://www.statista.com/statistics/291210/sme-small-and-medium-enterprises-united-kingdom-uk-by-sector/

30: https://www.gov.uk/government/statistics/business-population-estimates-2024/business-population-estimates-for-the-uk-and-regions-2024-statistical-release

31: https://www.aviva.com/newsroom/news-releases/2024/12/new-aviva-survey-reveals-smes-optimistic-about-2025-growth

32: https://www.aviva.com/newsroom/news-releases/2024/12/new-aviva-survey-reveals-smes-optimistic-about-2025-growth

33: https://www.santander.com/en/press-room/press-releases/2024/04/international-expansion-is-a-key-growth-driver-for-businesses-reveals-trade-barometer

34: https://www.santander.com/en/press-room/press-releases/2024/04/international-expansion-is-a-key-growth-driver-for-businesses-reveals-trade-barometer

35: https://www.gov.uk/government/statistics/small-business-survey-2023-businesses-with-no-employees/longitudinal-small-business-survey-businesses-with-no-employees-uk-2023#exporting-1

36: https://www.fsb.org.uk/resource-report/ready-to-dispatch

37: https://www.gov.uk/government/statistics/small-business-survey-2023-businesses-with-no-employees/longitudinal-small-business-survey-businesses-with-no-employees-uk-2023#exporting-1