The highest nutritional value of a meat sandwich is the meat. Its high protein and minerals outweigh the high-carb content of its neighbours.
Most economies are like meat sandwiches. The UK’s economy is a sizable one, with 5.59 million businesses employing 27 million people and generating a hefty £ 4.5 trillion annual revenue.
The bottom slice of bread makes up the largest segment of business: the 5.3m sole proprietors and micro-enterprises who employ, on average, 1.6 people each. In effect, these businesses are self-created “jobs” for their owners. They also make up a significant voting population. Let’s make a tentative assumption that most of these entrepreneurs have a partner with everything to gain and lose from their economy. That means the voting power of this segment approaches a meaningful 10.6m ballot wins. Keeping them happy is a vital priority of any adept politician with eyes on Downing Street.
The top side of the sandwich sees dramatically smaller 8,000-odd companies that carry significant punch in their employment and tax contributions. With their extensive boards, NEDs, advisors, investors, c-suite executives, and deep establishment, sometimes centuries old, they carry weight in the corridors of Whitehall and feed a thriving public relations and media industry. A ‘lobbying’ budget to access the biggest customer in the land is not uncommon, nor is the understanding that your government representative today will likely be your board member tomorrow as the revolving door of politics and business swivel on the axis of shared interest.
The middle of this sandwich makes up the remaining 246,000 companies that carry the unfortunate moniker SME. Mostly privately held by growth-minded, self-funded entrepreneurs, they employ an average of 58.5 people. They don’t have the numbers to impact voting significantly, nor the budgets to invest in lobbying the government for access to opportunities or to influence policy. They also are considered by many to be “doing just fine”, implying that they are better off than the many who are not and, therefore, no resources or support should be directed their way. Yet society should pay closer attention to them.
Building a business that matures from micro to established and growing requires a growth mindset. That mindset sees the business owner continuously investing their money and time, committing to the 50 to 80-hour week commonly needed to fill the multiple roles their business demands, making them some of the most committed investors in our country. Their limited access to funding also increases their investment horizon. Building a business into a wealth-generating asset typically requires a 20 to 30-year investment horizon. It takes time and money to anchor the business within its locations, communities, suppliers, customers and employees. SMEs also face high levels of competition, given the maturity of our economy and the vested interests in this segment. Competition drives innovation, which attracts talent and funding. Focusing on SMEs across the UK is vital to levelling up and creating a fairer, more inclusive economy, which is the cornerstone of sustaining a democracy.
As an aside, my objection to SME as a descriptor of this segment is manifold. I’ve yet to meet a business owner who is joyously risking everything they have, griding out 80-hour weeks, contending with the relentless challenges posed by suppliers, customers, employees and increasingly government red tape with the intent of building a ‘small’ business. Reducing the dreams and ambitions of front-footed entrepreneurs is offensive and condescending. Governments and corporations that refer to this segment ought to think about changing their language to change their behaviour and find resonance and relevance to this segment, whether they be clients or a voting segment of society.
Building, amplifying and accelerating the nutritional value of the meat in the sandwich to deliver these outcomes is critical to unlocking a thriving economy that puts Britain back in a leading position in the global economy. Let’s back these businesses with fervour and enlightened self-interest.
