Small Businesses Are the Backbone of the UK Economy

At the start of 2025 there were 5.64 million small businesses in the UK private sector. That figure represents 99.18% of all UK businesses. According to the Department for Business and Trade, the private sector had 5.69 million businesses in total with only 8,335 classed as large companies employing more than 250 people. These numbers show that the real strength of the UK economy lies not in the large corporations that dominate headlines but in the millions of small and micro businesses that drive local growth every day. When people talk about the economy they often picture big brands and major employers, but the data tells a different story. Small business owners, freelancers and start-ups make up almost the entire business landscape in the UK.

Why This Matters

The scale of small business activity highlights how essential local enterprise is to jobs, innovation and community resilience. Small businesses provide around 60% of private sector employment and play a vital role in local supply chains and economic recovery. They are also responsible for much of the innovation that shapes new markets and industries.

At a time when large companies are cutting costs or restructuring, small business owners are continuing to create new opportunities and adapt quickly to challenges. Their flexibility, creativity and commitment keep local economies alive.

What It Means for Entrepreneurs

If 99% of businesses are small that means there is space for every idea. Entrepreneurs do not need to compete with large corporations to make an impact. Instead they can focus on solving real problems, serving their communities and building something sustainable at their own scale. Support is crucial. Many small business owners start out with limited resources but thrive when they have access to the right guidance, mentoring and networks. That is where organisations like Portobello Business Centre make a difference. By providing advice, training and community connections, PBC helps founders move from concept to growth with confidence. Thinking about scale early is also important. Although most UK businesses begin small there is real collective power in the small business community. When owners share experiences, learn from one another and collaborate they build a strong ecosystem that benefits everyone.

The Bigger Picture

Small businesses are not just participants in the economy. They are the economy. They support families, create jobs and keep high streets and local areas vibrant. Every new business adds value no matter its size or stage. At Portobello Business Centre we believe that every business has potential to shape its community and contribute to long-term growth. Whether you are just starting or looking to expand your idea matters.

To explore the full data visit the official government report: Business population estimates for the UK and regions 2025.