A micro business boom born out of Brexit
Economic uncertainty and falling wages have stimulated an entrepreneur-led explosion of new business
This week it’s been confirmed that there are now 5.5 million companies in the UK, and that more than 99% of these businesses are SMEs. Meanwhile, data from LinkedIn suggests that there’s been a 5% increase in the number of micro businesses since Brexit.
Interestingly, the general consensus is that a combination of gloom over Brexit and a stagnantly weak pound is the driver here: in other words, those facing financial hardship are responding by taking the plunge and starting a business.
And this could be significant: not just for the future of Britain, but for how we understand and perceive entrepreneurs.
Entrepreneurs who earn a lot less than you do
The micro businesses that are rapidly increasing in number are typically one-man bands with minimal overheads – companies born out of necessity. In many cases, they open up simply because of larger businesses laying them off. And these bold individuals will challenge how people perceive entrepreneurs.
The word entrepreneur is now generally associated with a kind of business elite. When we talk about entrepreneurs, we’re soon talking about venture capital, business portfolios and big profits. And that blurs the reality.
The average entrepreneur – the kind we’re seeing emerge from our cash-strapped society – makes a profit, on average, of £13,000 a year.
How many of you would leave your job for that sort of money? There’s nothing ‘elite’ about it: this is life at the coalface. These are bold, risk-taking people and they quite literally have everything on the line. There is no safety net. If they don’t succeed, the consequences are real and painful.
So let’s all support these millions of entrepreneurs we have in every community and on every high street – and let’s be clear about who they are. Because chances are, they earn a lot less than you do.
With the Autumn Statement approaching, what do these hard-up entrepreneurs need?
This entrepreneurial spark should be carefully noted by the government before its upcoming budget announcements.
It has already backtracked on its national insurance tax on the self-employed which was a welcome revision. The problem of business rates continues to loom large and needs to be addressed urgently. And funding for start-ups as well as those wanting to scale remains a grey area for many.
But if the growing numbers of people going solo is truly a reaction to economic pressure, the government needs to show meaningful support. Bold policies are required to give entrepreneurs the reassurance they crave.
So if you’re a small business owner or aspiring entrepreneur, what do you need to be successful? And what are the biggest challenges you currently face? I’d love to hear your thoughts.
- Christian Nellemann is the Founder and CEO of XLN, a provider of low-cost phone, broadband, energy and card processing services exclusively to small businesses. A serial entrepreneur, he’s a two-time winner of Ernst & Young’s Entrepreneur of the Year award and one of only 17 inductees into their Global Hall of Fame. He is passionate about small businesses, and is a featured columnist for realbusiness.co.uk.
- Follow him on Twitter @christianxln