The Small Business Niche

A city with lots of small buildings and a few big onesLarge businesses dominate our conversations. Their brands are everywhere we look, in advertising and in the news. It is easy to overlook, however, the fact that large businesses, with 250 or more employees, make up a tiny proportion of the businesses in the UK.

Each year, the Department for Business, Energy & Industrial Strategy publishes estimates of the numbers of businesses of different sizes and locations. The figures below all come from the latest published estimates.

The figures relating to private sector businesses, as of the start of 2017, were estimated to be as follows:

  • 7,300 large businesses, with 250 or more employees
  • 34,000 medium-sized businesses, with 50 to 249 employees
  • 1.3 million small employers, which had staff aside from the owners
  • 4.3 million businesses which employed the business owners only

The total number of employments in small businesses, including the owners, was estimated at 12.8 million. This is more than the 10.6 million jobs provided by large businesses. There were an additional 3.3 million jobs in medium-sized businesses. It is common to group small and medium businesses together and call them SMEs, but since they are so different in nature, I prefer to keep them separate.

When I first told my friends that we were designing a payroll system specifically for small businesses, rather than for medium-sized firms or large corporations, I got some puzzled responses. A couple of them described this market as niche, which says something about how much their perspective was skewed towards large businesses. Larger businesses have bigger budgets, but there are far fewer of them. If a market of 1.3 million small employers is niche and a market of 41,300 medium and large businesses is mainstream, then I think I’ll stick with the niche.

Steven Tucker

By Steven Tucker - Co-founder

Steven is one of the founders of The Payroll Site. He writes about things affecting small businesses, especially those things connected with payroll. He's also a Maths graduate and a Chartered IT Professional and has a few views about technology, maths and the misuse of both.