Microbusinesses are the engine of the British economy. Businesses with 10 employees or fewer make up 96% of companies in the UK, so when they thrive, we all do.
However, they are rarely analysed as a standalone group and are under-researched, sometimes misunderstood and often under-served.
At GoDaddy we are trying to change that. Our Venture Forward study is a landmark analysis of 2.3 million microbusinesses, looking at how the make-up of British entrepreneurs has changed since the start of the pandemic, and measuring the importance of their businesses to local economies.
The data shows that despite the disruption caused by Covid-19, a new breed of everyday entrepreneur has emerged. This new group of microbusinesses, started since March 2020 show a surge in young people, women, and people from minority ethnic groups and disadvantaged backgrounds.
In fact, the percentage of start-up owners aged under 35 has more than doubled since March 2020, rising from 16.4% to 34%. Female entrepreneurs are up from 32% pre-March 2020 to 39.8% in the months since, while the proportion from disadvantaged communities has risen from 13.2% to 15.1%.
At GoDaddy we are focused on empowering entrepreneurs and making opportunity more inclusive for all, so its encouraging to see that our enterprise community is becoming more diverse.
However, the data also shows that the UK’s microbusiness landscape remains dominated by a North-South divide. The top three regions where company 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 (10.2% / 9.8%).
By mapping the concentration of microbusiness owners against local population sizes, GoDaddy has produced a ‘venture density’ ranking for every one of the 650 constituencies in Great Britain. The top 14 entries are all in London. Of the 50 constituencies with the highest venture densities, only six are not in London, South East or South West. This is something we must look to address.
I’m fortunate to work first-hand with an incredible selection of microbusiness owners. One such owner is Cleo Morris, 28, from Birmingham, who set up Mission Diverse in October 2020 to connect minority and under-represented communities with companies through entrepreneurship and employability training, education and mentoring. Around 70% of Mission Diverse sign-ups are women, with the majority coming from black backgrounds, and Cleo wants to have trained 1,000 entrepreneurs over the next five years.
Cleo’s work is evidence that the UK’s enterprising spirit is not confined to London and the South. Throughout the country there are budding entrepreneurs with brilliant ideas and energy, who just need the right support and advice to get started.
Venture Forward clearly shows that with the right policy infrastructures in place, microbusinesses have the power to contribute to levelling-up disadvantaged areas. Over half of all microbusinesses turn over more than £25,000 a year and three quarters employ at least one other person. Put simply, the more microbusinesses there are in a community, the better the job prospects and finances of the people that live there.
At GoDaddy we are committed to sharing these findings with national and regional policymakers. We want to use Venture Forward data to improve knowledge about the country’s microbusinesses, and create opportunities for owners across the UK to flourish.
We all stand to benefit from a strong microbusiness community, so let’s ensure they are given a key role in the levelling-up agenda.