Micro-enterprises are the engine of the UK economy, particularly when it comes to growth. Companies with 10 employees or fewer make up this 95 percent of companies In the United Kingdom. So when they thrive, we all thrive.
However, they are rarely analyzed as a distinct group and are under-researched, sometimes misunderstood and often inadequately considered.
At GoDaddy we’re trying to change that. Our Venture Forward study, developed in collaboration with the University of Kent, analyzed 2.3 million micro-businesses, examining how the composition of UK entrepreneurs has changed since the start of the pandemic and measuring the importance of their businesses to the local economy.
“Micro-enterprises have the power to help level up disadvantaged areas”
The data shows that a new generation of everyday entrepreneurs has emerged amid the disruptions of the pandemic. The proportion of start-up owners under the age of 35 has more than doubled since March 2020, rising from 16.4 percent to 34 percent. In this group, the proportion of 18 to 24 year olds rose from just 1.7 percent before the pandemic to 8.6 percent in the two years after the Covid-19 outbreak.
The demographic structure of entrepreneurs has also started to become more diverse, with the proportion of women entrepreneurs increasing from 32 percent before March 2020 to 39.8 percent in the months since, while the proportion from disadvantaged communities increased from 13.2 percent to 15, 1 percent has risen percent.
The proportion of entrepreneurs from ethnic minorities is also gradually increasing. Black founders account for 5.4 percent of companies before the pandemic and 6.6 percent of those founded after March 2020. The corresponding figures for Asian entrepreneurs are 10.1 percent before the pandemic and 11.9 percent after the start of the pandemic.
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At GoDaddy, we’re focused on empowering entrepreneurs and making opportunities more inclusive for everyone. Therefore, it is encouraging to see our business community becoming more and more diverse.
However, the data also shows that the UK micro-enterprise landscape remains marked by a north-south divide. The top three regions where business founders live are the same before and after March 2020: London (21.7%/22.6%), the South East (18.5%/17.0%) and the South West (10th). .2 percent/9.8 percent). Percent).
By mapping the concentration of micro-business owners to local population size, GoDaddy has created a “business density” ranking for each of the 650 constituencies in the UK. London is the capital of our micro business community and the top 14 entries are all based there. Of the 50 busiest constituencies, only six are not in London, the South East or the South West. This is something we need to address.
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I am fortunate to work first-hand with an incredible range of micro-entrepreneurs. One of those owners is 28-year-old Cleo Morris from Birmingham, who founded the company Mission diverse in October 2020 to connect minorities and underrepresented communities with businesses through entrepreneurship and employability education, training and mentoring. Around 70 percent of Mission Diverse enrollees are women, with the majority from black backgrounds, and Cleo aims to have trained 1,000 entrepreneurs in the next five years.
Cleo’s work is proof that Britain’s entrepreneurial spirit is not limited to London and the South. Across the country, there are aspiring entrepreneurs with brilliant ideas and energy critical to advancement who simply need the right support and advice to get started.
Venture Forward clearly shows that with the right policy infrastructure, micro-enterprises are able to contribute to the regeneration of disadvantaged areas. Over half of all micro-businesses have a turnover of more than £25,000 a year and three quarters employ at least one other person. Simply put, the more microbusinesses there are in a community, the better the job prospects and finances of the people who live there. This is directly related to the government’s leveling agenda.
Further research carried out by GoDaddy as part of the Venture Forward study shows that the number of ‘side hustles’ has risen by almost half in the last two years as Brits struggle with the rising cost of living. The proportion of entrepreneurs who also have a separate full-time job has increased from 20.8 percent before March 2020 to 31 percent today (an increase of 49 percent).
Our research also shows that many of these micro-enterprises may have arisen out of economic necessity during a turbulent time for people’s jobs and incomes. Before the pandemic, the number of micro-entrepreneurs who were unemployed before starting their business was 5.7 percent, while the number of part-time workers was 7.9 percent. These numbers have increased to 7.3 percent and 11.7 percent, respectively, since March 2020.
One of those owners is part-time postman Cameron Langston, 22, from East London, who founded the business Barking + screaming, a pet accessories company, during the lockdown in April 2021 to supplement its income. His job helps him pay the bills while he invests the additional income from Bark + Shout back into the company to help it grow. Based on his success so far, he hopes to be running Bark + Shout full-time by the end of the year.
Cameron’s “side hustle” shows how many people are starting their own businesses to generate extra income, especially now as the financial challenges of the pandemic are compounded by a cost-of-living crisis. However, the shift to e‑commerce and the possibilities of the second digital revolution have enabled people to start businesses quickly and easily. What is important now is that these entrepreneurs are supported in building a company with a long-term focus.
Cameron, like many other small business owners emerging from the pandemic, has benefited from being able to take his business entirely online. With GoDaddy’s support, entrepreneurs and business owners were able to quickly get online and establish an online presence so they could sell their goods anytime, anywhere and ultimately grow their business.
At GoDaddy, we are committed to sharing our insights with national and regional policymakers. We want to use data from our studies to improve knowledge of the country’s micro-enterprises and create opportunities for everyone to succeed in business, no matter where they are in the country.
We can all benefit from a strong microbusiness community. So let’s ensure they have a key role in the improvement agenda.
Ben Law is Head of UK and Ireland. Go Daddy
further reading
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