Analyzing the Impact of Small Businesses on the UK Economy

This report examines the significant contributions of small and medium enterprises (SMEs) to the UK economy. It identifies the positive effects of small businesses, including their role in job creation, revenue generation, and overall economic growth, particularly after Brexit. The report highlights the substantial number of SMEs in the UK, their combined turnover, and their contribution to government revenue. It also illustrates the significance of SMEs in fostering innovation, attracting investment, and maintaining a balanced economy. Furthermore, the report emphasizes the role of SMEs in social development, providing employment opportunities and supporting sustainable development. The conclusion underscores the mutual benefits between SMEs and the UK economy, suggesting the need for effective government policies to support their growth and development. The report references various books, journals, and online resources to support its findings.

Entrepreneurship and Small
Business Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Identifying the effect of small business on economy of UK. ................................................3
2. Illustrating the significance of small business to economy and growth of social economy.
.....................................................................................................................................................5
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Each big organization started out small business led by an entrepreneur. An entrepreneur
is a person who basically owes as well as manage business. Meaning of an entrepreneur is that an
entrepreneur mainly emphasizes on developing a market for their products or services on the
basis of business plan. Small business is basically an interdependent own as well as operated
organization which are generally limited in size and in terms of revenue.
The report emphasizes on analysing the way small business have effect on economy of
UK. Study have focus on illustrating the significance of small medium enterprise to economy.
MAIN BODY
1. Identifying the effect of small business on economy of UK.
Small business can be defined as non subsidiary which are independent organization
which consist of only few numbers of workers. These organisations generally have few
operations and operates business ta small scale. In context of United Kingdom, small medium
enterprise has made significant contribution in the economic development of nation. These
enterprises has supported United kingdom in overcoming the financial crisis after Brexit. There
are approx. 5.6 million of small medium enterprise in UK. In context of United Kingdom, the
small medium enterprise in UK consists of 93.3 percent of private sector business. During the
year 2018, there were approx. 5.7 million private sector business in UK (Gonçalves, Gaio and
Robles, 2018).
During the last few years small medium enterprise in UK has contributed towards
generation of 16.3 million of employed and provided the incomer sour e top local people. Small
business enterprises in UK has combined turnover of 2.0 trillion £. Over the last few years the
small medium enterprise in United kingdom has bought approx. 60 percent of funding. In context
of United kingdom the small medium enterprise in UK plays crucial role in the development of
nation. Ion relation to the UK, the small medium enterprise in nation during the year 2016 to
2017 enabled government to earn the 5.6 billion £ income. It is the reason small medium
enterprise is considered to be as backbone of UK economy (Johnson, 2018). The small medium
enterprise by facilitating the innovation attracts investors and influence them to make
investment. In addition to this, the small medium enterprise in UK has assisted nation in
maintaining the balanced economy. These organisations has supported other big enterprises in

earning higher revenue as well as profitability. According to the latest report of manpower
business detail , it has been found that an entrepreneurial spirit among the people in the UK is
increasing. Now there are approx. 5.6 million small medium enterprise in UK. In addition to this,
the small medium enterprise in United kingdom has assisted nation in reducing the debt after
Brexit. In context of United Kingdom, there are few small medium organisation in UK
exporting the goods to other nation and there are paying the tax to government, hence making
their significant contribution towards GDP. The small medium organisation in UK has helped the
nation in increasing the productivity and supported country in maintaining the balance between
supply as well as demand which is very much essential in order to achieve balanced economy.
By analysing the report of confederation of British industry, it has been estimated that if the
small medium enterprise in UK given with opportunity to develop then the can make significant
contribution of approx. 20 billion £ towards economy by 2020.
Illustration 1: Contribution of small medium enterprise towards UK economy
(Source: Essential Facts You Should Know about SMEs in the UK/2019)

2. Illustrating the significance of small business to economy and growth of social economy.
The small medium enterprise has great significance for UK economy, as these
organisation are making their significant contribution in the both economic and social
development of nation. The small medium enterprise in UK is very much important as these
firms are generating the high level of employment for local people. Over the last few years, small
medium enterprise in United Kingdom has provided employment to approx. 16.3 million people.
The s mall medium enterprise in UK is catering the needs of people in UK by developing the
goods or services according to their requirements (Small businesses driving record UK
employment level, 2017). It is the small medium enterprise in UK which is promoting the
sustainable development of society in the nation. During the year 2018, the small medium firm in
United kingdom has earned the revenue of 2.0 trillion £ that has been utilized by the government
for development of nation (UK Small Business Statistics, 2019). Small medium enterprise in
United Kingdom plays very much crucial role in nation overall production network. It is the
small medium organization in United nation which has played vital role in dealing with the
different major issues such as poverty, unemployment etc. There are few small medium
enterprise in UK has established the training centres at different locations for children belonging
to the poor family background (Essential Facts You Should Know about SMEs in the UK, 2019).
Such training institutions has been established by the small medium enterprise for supporting
poor children in developing the skills as well as knowledge which can be helpful for them fort
getting the employment.
CONCLUSION
It has been concluded from the assignment that the small medium enterprise is making
the valuable contribution in social and economic development of nation. The other fact which
has been summarized from the above is that the small medium organization in UK has great
significance. It has also been concluded from the assignment that development of the small
medium enterprise in UK can be beneficial for growth of nation. The other fact which has been

discovered is that small medium firm sin UK has mutual beneficial relationship with UK
economy.
It has been suggested that the government in the nation should develop an effective
policies and laws for supporting the small medium enterprises in fostering growth.

REFERENCES
Books and Journals:
Gonçalves, T., Gaio, C. and Robles, F., 2018. The impact of Working Capital Management on
firm profitability in different economic cycles: Evidence from the United
Kingdom. Economics and Business Letters.7(2). pp.70-75.
Johnson, P., 2018. New firms: An economic perspective. Routledge.
ONLINE:
Small businesses driving record UK employment level. 2017. [ONLINE]. Available
through:<https://smallbusiness.co.uk/smes-driving-employment-levels-2539643/> .
UK Small Business Statistics. 2019. [ONLINE]. Available
through:<https://www.fsb.org.uk/media-centre/small-business-statistics> .
Essential Facts You Should Know about SMEs in the UK. 2019. [ONLINE]. Available
through:<https://www.market-inspector.co.uk/blog/2017/05/facts-about-small-medium-
businesses-in-the-uk> .