The Importance of Micro Enterprise Owners to UK Biz
There are 4.5 million private enterprises in the UK of which 99.9% are SMEs (Small or Medium Enterprises). There are only just under 6000 companies that are not SMEs, that is they are ‘Large’ companies.
We use the terms micro enterprise and micro business to describe the majority of businesses in the UK. These terms cover all enterprises started and run by the owner that have less than ten employees. A business with no employees at all is still a micro enterprise and the success of a business should not be measured in terms of employees.
This micro size of business includes all the self employed, sole traders, freelancers, partnerships, home businesses, limited companies and social enterprises. Most of us micro enterprise owners refer to ourselves as small business owners (because we haven’t read the EU definitions for micro, small, medium and large businesses).
We believe the term ‘SME’ used by Government, BigCos and Academics is patronising, meaningless and deceitful. It is used as a catch all synonymous with the word ’small business’. It is not. They imply through the term SME that they are supporting or training or lending or helping small businesses whereas at least 95% of their support goes to less than 5% of SMEs – the larger small and medium enterprises. Medium Enterprises (50-250 employees) and many small businesses with 10 or more employees have little in common with micro enterprises.
Micro Enterprises have been started by and continue to be run by their owner – the entrepreneur – who has risked their own money and time to start, survive and thrive in their own enterprise. Micro Enterprises usually do not have career and functional managers employed in the businesss.
97% of all private enterprises are micro enterprises (0-9 employees)
About three quarters of all enterprises in the UK have no employees at all.
About one in seven of the adult workforce are running their own micro enterprises. This is why self employability and start up skills & know how are as important as employability and sector specific skills and know how.
Up to half a million people start their own micro enterprises each year and the UK stock of micro enterprises is increasing year on year – there were about another 50,000 last year.
Most of the innovation and new jobs in any region comes from these new micro enterprises.
As many people start a micro enterprise because it is their best or only means of earning a living as they do because they want to exploit an opportunity to earn lots of money. Indeed, the main reason in the uK that people start their own micro enterprises is because they want to control their own destiny.
About two thirds of people running micro enterprises have no prior business or management experience. The skills and know how you need to start and run a business are not the same as business studies or management training. they are a specific skill and knowledge set and these are described for the UK, through research by an organisation called SFEDI (http://www.sfedi.co.uk).
Almost all micro enterprise owners say they develop their running their own biz abilities by learning from experience and about half learn from other enterprise owners. Enterprise learning and support must be experiential, active and integrated into the actual biz.
The right learning and support for start ups with help for test trading can make a massive difference to survival rates – certainly, over 20% difference. For example 80% can survive over 3 years with the right support at start up and 1 in 6 of these (we don’t know which will be the 1 in 6 – it’s impossible to pick winners but government programmes try!) will go on to be substantial employing businesses.
Practical hand holding test trading from the enterprise coach, adviser, mentor appears to make the biggest difference to survival and growth. This why the Enterprise Rockers believe all start ups should have access to a coach, adviser, mentor to help with test trading and to help not only at start up but for 12 months.