Last Updated: June 21, 2021
How does the UK fare when it comes to entrepreneurship? Anywhere between 500,000 to 700,000 new businesses are started in the UK each year. This goes to show how robust and dynamic the entrepreneurship scene in the UK is. A good way to understand these trends is through startup statistics UK 2021.
Many people are unaware of the exact relevance of entrepreneurs in the UK. Hence, we have brought you a number of the most insightful entrepreneurship statistics UK. We hope that you gain a clearer understanding of entrepreneurship in the UK through these entrepreneur facts.
Top Ten Entrepreneurship Statistics UK
- There are 5.93 million businesses in the UK.
- Approximately, 20% of all businesses fail within the first year while 60% go bankrupt within the first three years.
- In the UK private sector, there are approximately 3.5 million sole proprietorships (which makes up around 59% of the total private sector).
- In 2020, the overall turnover of private sector businesses in the UK amounted to 4.14 trillion British pounds.
- 64% of working-age people in the UK want to start their own business.
- In the UK, the average entrepreneur budgets 5000 pounds to launch their business.
- Almost 1 in every 3 entrepreneurs in the UK is female.
- 29.4% of business owners in the UK have qualified for the A levels in terms of educational qualification.
- Nearly 43% of those who want to be entrepreneurs do not think they will end up starting their own business.
- Laurance Graff, the jewellery tycoon, started his first business at the tender age of 18.
Entrepreneurship Stats UK
There are 5.93 million businesses in the UK
This statistic gives an overall understanding of British entrepreneurship. Most of these businesses are small in nature comprising less than 49 employees. Approximately, 35,600 of these businesses are medium-sized (between 50 – 249 employees) while there are only 7,700 large companies (with more than 250 employees).
In the UK private sector, there are approximately 3.5 million sole proprietorships (which makes up around 59% of the total private sector)
This gives us an idea of the overall number of UK entrepreneurs. Apart from the 3.5 million sole proprietorships, there are approximately 2 million companies that are actively trading and 414,000 ordinary partnerships.
The number of private sector businesses has increased 3.5% between 2018 to 2020, translating to more than 200,000 new businesses
The number of entrepreneurs in the UK has been increasing at a fast rate. The primary reason for the growth in entrepreneurship in the UK is the inability to find traditional employment. Most of these companies are single-person businesses comprising 76.3% of all private sector businesses.
Starting a business has been found to be highly risky. Approximately, 20% of all businesses fail within the first year while 60% go bankrupt within the first three years
A lot of people ask why do small businesses fail. The primary reason entrepreneurs fail is because there is no market need for their products or services. This reason accounts for 42% of all startup failures. The second most common reason for a new business to fail is the lack of capital which accounts for 29% of all failures. However, knowing how many businesses fail should not stop your entrepreneurship dreams. The entrepreneurship success rate may grow along with the UK economy.
In 2020, the overall turnover of private sector businesses in the UK amounted to 4.14 trillion British pounds
The importance of entrepreneurship to the UK economy cannot be overestimated. Private sector businesses comprise a significantly large portion of the UK economy. The overall turnover of private sector businesses in the UK has increased by a trillion British pounds since 2012.
In the UK, the average entrepreneur budgets 5000 pounds to launch their business
This statistic points us towards how much capital an entrepreneur needs to start a new business. The average business spends approximately 22,000 British pounds within their first year. Hence, it is important to know not just the cost of launch but also the cost of surviving in the market.
64% of working-age people in the UK want to start their own business
The primary reason people in the UK want to start their own business is to improve their earnings. The second most common reason for people wanting to start their own business is to become self-employed and be their own boss. The ability to set your own working hours and being able to work from home have also been found to be powerful motivators.
Approximately 43% of those who want to be entrepreneurs do not think they will end up starting their own business
There are several reasons why people in the UK are hesitant about starting their own business. Around 1 in 10 potential entrepreneurs cite Brexit as a reason they are putting off starting their own business. Men primarily worry about the competition that they will face once they start their own business as well as the risk of failure. In contrast, women worry about whether they have the necessary skills or if they are qualified enough.
Entrepreneurship Statistics UK: Demographics
The highest number of small business owners (31%) are in their forties
Even though the most common age range for entrepreneurship in the UK is between 45-54, there is no need to worry even if you don’t fall into this age range. There are plenty of entrepreneurs who are aged between 35 – 44 (25%) and between 55 – 64 (26%). This shows that young business owners are few and far between, hence, young people can be more patient with their ventures. However, successful young entrepreneurs are not unheard of, so don’t be too afraid to take the plunge.
Approximately 1 in every 3 entrepreneurs in the UK is female
The number of women who are entrepreneurs in the UK is lower than in similar economies. The reasons for it range between lack of access to capital, lack of network, and childcare responsibilities. It is estimated that up to 250 billion pounds of value could be added to the UK economy if women launched and grew new businesses at the same rate as men.
The most common reason for women to start a new business is to have flexibility around childcare
The motivations for men and women to start a new business are different. A high percentage of women cite childcare responsibilities as their primary driving force to be self-employment rather than seek employment. Women have also been five times more likely to cite family reasons for starting their own business compared to men.
Almost one-third of all entrepreneurs in the UK are located in London or the South East
There is a significant divide in economic output between North and South UK. The Southern region of the UK has been historically more productive and it seems like it remains so. These startup statistics UK provide a broader socio-economic picture of the UK.
29.4% of business owners in the UK have qualified for the A levels in terms of educational qualification
The majority of business owners are A-level qualified. In contrast, approximately 21.8% of business owners have a degree or equivalent. Only 11% of business owners in the UK have no educational qualification at all.
Approximately two-thirds of all entrepreneurs in the UK said that they had no prior experience in managing or owning a business before starting their own concern
It is highly likely that first-time business owners in the entrepreneurship sector are completely inexperienced when starting their own business. However, around half of all respondents to this survey have reported that they have previously worked in the same industry.
Small entrepreneur business owners who come from ethnic minority backgrounds contribute 25 billion pounds to the UK economy every year
However, business entrepreneurs from ethnic minority backgrounds face challenges that other entrepreneurs do not face. These challenges include disproportionately greater difficulty in accessing finance and the lack of mainstream support.
In May 2020, the Reuben brothers, one of the most successful entrepreneurs, became the second richest family in the UK
The Reuben brothers (David and Simon Reuben) have been one of the wealthiest families in the UK and are considered two of its best entrepreneurs. Their wealth largely comes from real estate investments across the globe. Together, they are estimated to have a net worth of 16 billion pounds.
Phillip Green’s clothing giant the Arcadia Group had a 12% market share in the UK at its peak
Philip Green, the top entrepreneur who was known for throwing lavish parties, was worth 4.8 billion pounds at the peak of his career.
Laurance Graff, the jewellery tycoon, started his first business at the tender age of 18
Laurance Graff, one of the most inspirational entrepreneurs, was known to be a risk-taker in a relatively traditional industry. He started his own company in 1960 which is today a household name in jewellery circles. The company now owns 50 boutiques worldwide.
James Dyson, the billionaire inventor and one of the best entrepreneurs, developed the vacuum machine that became the highest selling vacuum machine in the UK upon its launch in 1993
James Dyson had a degree in art and it was not immediately obvious that he would go on to become an inventor. His journey started when he became frustrated with the vacuum cleaner used in his home and invented one that used cyclonic power to clear the dust.
Richard Branson, one of the top business entrepreneurs, founded the Virgin Group of companies that operated more than 100 different businesses in the 1990s
Richard Branson talked about becoming a business entrepreneur since he was in his teens. In 1973, he formed Virgin Records which became the principal label for punk and the new wave in the 1970s. In 2004, he founded Virgin Galactic, a space tourism company.
Entrepreneurship in the UK is burgeoning as we speak. Around 1845 new startups were founded every day in the UK in the 2018 to 2019 tax year. These entrepreneurship stats have been curated to provide a broad view.
Even though they might not tell you how to be a successful entrepreneur, we hope that you have found these entrepreneurship statistics UK helpful and now have a clearer picture relating to entrepreneurship.
Remember that trends change and you should take these entrepreneurship trends with a pinch of salt.