Experian study reveals explosion in the number of entrepreneurs in the UK
117 per cent increase in the last five years

Nottingham, 16 September 2010 – The number of small business entrepreneurs in the UK has leapt by 117 per cent in the last five years, according to Experian, the global information services company.  The massive growth in one or two man band businesses has fuelled a 41 per cent increase in the total number of companies in the UK.

Experian’s business data also shows that these small businesses over the last five years have also managed to maintain the lowest insolvency rate and second healthiest financial strength score[1] compared to other types of businesses.

Charlotte Hogg, Managing Director, Experian UK & Ireland, said: “Our analysis reveals that the UK’s smallest businesses have been surprisingly resilient during the economic downturn and have also seen their population skyrocket in the last five years.

The recession will have been an underlying factor in the 183 per cent increase in micro businesses[2].  Many start ups will have been created because of a change of circumstance, where people found themselves unemployed and needed to look at alternatives. Equally, micro-entrepreneurs have also capitalised on their agility to provide great service at the most competitive price during the recession, which is all the more impressive given the UK’s late payment minefield.”

“The DNA successful micro businesses share is in their inherent innovative and adaptive capacity, but as they grow in size so do the challenges they face. Our analysis tells us that they suffer the worst growing pains when they start to employ 10 or more people and this is precisely when they need the most support.  It is this kind of data insight that can play an instrumental role in helping policymakers create the right responses to the economic environment to identify where growth is going to come from as well as where help and support is needed most.”

The analysis of over 4.3 million UK directors on Experian’s business database reveals that the explosion in the number of directors associated with one and two man businesses was spearheaded by male entrepreneurs (up 146 per cent) and, in particular, by male directors in the younger age groups (under 24 saw a 62 per cent increase and 25-29 increased by 54 per cent).

The number of female entrepreneurs also saw a significant increase – up 72 per cent over the last five years.  At the opposites end of the spectrum to men, this was led by older females – with a 29 per cent increase in the 60-69 age group and 13 per cent rise in the over 69 bracket.

Experian’s analysis reveals that the business/management and consultancy sector saw the highest number of one and two man businesses (5 per cent of all these business types) with a 181 per cent increase in numbers over the last five years.  Businesses in this sector typically fall into the training, management consultancy, public relations and marketing sectors.

In terms of which areas witnessed the biggest growth in entrepreneurship, London has the highest concentration of one and two man businesses (31,449) - having seen 105 per cent growth in the last five years.  Birmingham had the second highest number (10,207) with growth of 188 per cent.

Top Ten Cities and Towns for Micro Businesses

2005

2010

% Growth

LONDON

15320

31449

105%

BIRMINGHAM

3546

10207

188%

GUILDFORD

2688

6954

159%

BRISTOL

2368

6852

189%

READING

2434

6793

179%

BELFAST

1119

6686

497%

SHEFFIELD

2012

6118

204%

BRIGHTON

2336

5927

154%

TONBRIDGE

2353

5902

151%

MANCHESTER

1827

5872

221%

 

Top Ten Sectors for Micro Businesses

2005

2010

% Growth

Business/management consultancy activities

         7,503

        21,118

181%

General building construction

         4,719

        14,349

204%

Software consultancy and supply

         6,849

        13,496

97%

Architectural/engineering activities

         4,757

        11,053

132%

Other computer related activities, including web based services

         3,070

        10,637

246%

Development and selling of real estate

         3,529

        10,242

190%

Letting of own property

         2,385

         7,561

217%

Accounting/book-keeping activities

         4,739

         7,291

54%

Installation: electrical wires/fittings

         1,809

         6,781

275%

Other retail sale: specialised stores

3,854

6,741

75%

Source: pH, an Experian company.

ENDS
Contact:

Ms Serj Heera
PR Manager
0115 992 2773/07837 652169
serjeet.heera@uk.experian.com
 
Methodology

pH, an Experian company, conducted the research by analysing the current details of over 4.3 million directors registered in 2010 on Experian’s National Business Database (NBD).  The NBD is one of the most comprehensive business data sources in the UK.  It combines ten independent and trusted data sources, including Yellow Pages, Thomson and Companies House information, to create an in-depth picture of the business universe in the UK.  Comparisons were made by analysing the details of over 4.2 million directors from the NBD registered in 2005.

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[1] The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.  Businesses with one or two employees have maintained the second highest score, after businesses with more than 500 employees.
[2]   Experian’s data shows that the number of registered directors associated with businesses that have one or two employees increased by 117 per cent, while the number of registered companies with one or two employees increased by 183 per cent.

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