At the beginning of 2020 just before COVID was at its peak, there were 5.9 million Independent businesses across the UK. However, that has dropped by 6.6% decreasing the number to 5.5 million.
From the businesses that struggled during and after the pandemic, it was non-employers (no more than one employee in the business) that were hit hardest. 13.7% of workers in the UK registered as self-employed in 2021, the lowest self-employment rate since 2011.
Even though there have been huge changes due to the pandemic, 99.9% of the UK’s business population are small to medium sized. A clear indication that they are still an important part of the UK’s economy.
Handepay works closely with independent businesses every day, so we understand how important they are and the challenges they face.
But what do independent businesses bring to the economy and what are the advantages to using them?
UK and local economy
In 2021, the total turnover was £2.3 trillion with £1.6 trillion coming from small businesses (0 - 49 employees). Unsurprisingly, London came top of the list for highest turnover and 91% of total UK turnover was generated in England.
As for the local economy, research has shown that for every £10 spent with a local independent shop, an additional £50 is put back into the economy, as local business owners are likely to put the money they earn back into the community. Even house prices are affected by the local economy. Town centres with a thriving independent economy increase the cost of housing by up to £40,000!
Currently there are 32.6 million employed across the UK. By the end of 2021, 12.9 million were employed withing a small business (0 – 49 employees), equating to 48% of the working population.
Construction is the UK’s largest sector, totalling 16% of the business population. Yet it is wholesale and retail sector that has the highest employee rate, with 46% being employed by a small to medium business.
The Federation of Small Businesses also found that 60% of the UK’s private sector workforce are employed in an independent or local business.
Ability to adapt
With the changes that have happened over the last few years, adaptability is vital. During COVID, independent businesses had to adapt to ensure they would survive, with 52% of businesses stating that the introduction of a new service was crucial. 88% said that they would continue the new services after the pandemic.
For example, restaurants started takeaway services, grocers and convenience stores offered a delivery service; many even moved online for the first time!
Advantages of shopping local for consumers
Overall larger businesses (both nationwide and worldwide) cater to the masses, whereas independent stores can tailor to specific and/or smaller audiences in the local area. This ensures that independent shop owners can customize the customers journey, making for a more personal and satisfying experience.
Keeping it unique
Depending on the products or services a business sells, most have unique products that cannot be found anywhere else. Whether this involves gifts, clothing, trades or online services, the journey can feel more unique than heading straight to a nationwide business.
Quality over quantity
Though you can access almost anything online from major retailers (which can sometimes be more convenient), you may not always get the best for your money. Independent businesses understand that they quality of the product is important, from handmade products to working with local trades.
Helping the environment
Looking after the environment is an important aspect to today’s world. Many independent businesses source locally or within the UK, reducing the amount of carbon from products flown overseas.
Independent businesses are vital to the running of the UK economy, from increasing employment to helping the environment. Independent Industries are the backbone to business, employment, tourism and so much more. In spite of the challenges they have faced over the last few years, Independent businesses are and will continue to be the driving force to the UKs economy.
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