Posted: Fri 17th Jun 2016
The government has released a major survey of more 15,000 small and medium sized employees. Included in the report are interesting statistics collated in 2015 about Britain's millions of zero employee companies which make up 76% of all firms in the UK. We've pulled out a few of the numbers below. Stat-tastic!
The most populous sectors among zero employee businesses are construction (20%) and professional/scientific (15%).
93% operate from a single site.
59% have a main work premises is also their home, or the home of the business's owner. 61% of unregistered companies have this profile.
61% have sole proprietorship as their legal status, 28% are private companies limited by shares, and 5% are partnerships.
The legal statuses of registered and unregistered zero employee businesses are very different: 77% of unregistered businesses are sole proprietorships, compared to 16% of registered businesses. 65% of registered businesses are limited companies, compared to 16% of unregistered businesses.
79% of zero employee businesses have a single owner. (59% of registered businesses and 89% of unregistered businesses.
77% have only one partner/director in day-to-day control of the business.
48% of registered zero employee businesses have just one owner, compared to 87% of unregistered businesses.
91% are defined as family-owned businesses, defined as one which is majority owned by members of the same family, including businesses with just a single owner or partner.
22% are majority-led by women, defined as controlled by a single woman or having a management team of which a majority were
25% of unregistered zero employee businesses are women-led, compared to 14% of registered zero employee businesses.
5% are minority ethnic group, defined as having a person from an ethnic minority in sole control of the business or having a management team with at least half of its members from an ethnic minority.
There was no difference in this proportion by size or status of business, but MEG-led businesses were more likely than average to be found in the information/communications (11%) sector.
6% of zero employee businesses employed people 12 months previously. This is the case for 13% of registered zero employee businesses, and 4% cent of unregistered businesses.
12% expect to employ people in 12 months' time (17% of registered zero employee businesses, and 10% of unregistered businesses.)
25% of zero employee businesses have a greater turnover (value of sales) than a year previously. 50% have approximately the same turnover and 23% have a lower turnover.
Registered zero employee businesses were more likely to have had increased turnover (29%) than unregistered businesses (23%).
31% expect turnover to increase in the next 12 months, 50% thought it would remain roughly the same and 13% thought it would be less.
Overall, 38% of businesses with no employees had innovated in the last three
years, be this the introduction of new or significantly improved goods or services, or the
introduction of new or significantly improved processes. Registered zero employee
businesses were more likely to have done so (44 per cent) than unregistered businesses
(36 per cent).
Thirty-four per cent of businesses with no employees had introduced new or
significantly improved goods or services in the last three years (16 per cent goods, 29
per cent services). Sixteen per cent had introduced new or significantly improved
processes in the last three years.
Ten per cent of zero employee businesses had exported goods or services in the last 12
months (four per cent goods, seven per cent services). The proportion of registered zero
employee businesses that exported (20 per cent) was about the same as the figure for all
SME employers (19 per cent). Fifteen per cent of these zero employee registered
businesses exported services, compared to 11 per cent of SME employers. Only seven
per cent of unregistered businesses exported.
Four per cent of zero employee businesses had not exported in the previous 12 months,
but planned to export in future, the same proportion as for SME employers.
Ninety per cent of zero employee businesses had access to the internet for work
purposes. Fifty-nine per cent had their own website. Less likely to have their own website
were zero employee businesses in the primary (30 per cent), construction (42 per cent)
and transport/storage (48 per cent) sectors.
Seventy per cent of zero employee businesses were digitally engaged, meaning that they
had a website, used a third party website such as Amazon, Etsy or Ebay, or had their own
social media profile. The proportions of registered and unregistered zero employee
businesses that were digitally engaged were about the same. Unregistered businesses
were more likely to use third party websites than registered businesses (21 per cent
compared with 14 per cent).
Eleven per cent of all Zero employee businesses had websites where goods and services
could be ordered directly, but 28 per cent engaged in some form of e-commerce,
including goods and services being ordered from third party websites, goods and services
ordered from social media, bookings or orders made directly from their own website
without payment at the time, or bookings or orders being made directly from third party
websites without payment at the time.
Unregistered businesses were more likely to engage in any form of e-commerce (30 per
cent) than registered zero employee businesses (22 per cent).
Access to finance
Nine per cent of zero employee businesses had sought external finance in the 12
months preceding interview. Registered businesses with no employees were more likely
to have done this (11 per cent) than unregistered businesses (eight per cent), but these
proportions were lower than for SME employers (17 per cent).
Of those that had applied for external finance in the previous 12 months, the reasons for
seeking it included working capital or cash flow reasons for 47 per cent, 36 per cent to
acquire capital equipment or vehicles, 10 per cent to buy land or buildings, and six per
cent for each of research & development and marketing.
The most commonly sought types of external finance in the previous 12 months were
loans from financial institutions (41 per cent), bank overdrafts (40 per cent), credit cards
(20 per cent) and leasing/hire purchase (18 per cent). Compared to SME employers, zero
employee businesses were less likely to seek overdrafts, leasing/HP, factoring/invoice
discounting and commercial mortgages.
Seventy-one per cent of zero employee businesses that applied for external finance
obtained at least some of what they wanted. Sixteen per cent did not obtain any, and for
the remaining 13 per cent the decision was still pending. This success rate was lower than
for SME employers (81 per cent of these obtained some money), and was about the same
for both registered and unregistered zero employee businesses.
Eleven per cent of Zero employee businesses had a need for finance in the previous 12
months but did not apply for it. This proportion was three percentage points lower than
that observed in SBS 2014.
The median average amount of finance sought by unregistered businesses was Â£5,000,
compared with Â£20,000 for registered zero employee businesses, and Â£30,000 for SME
Fourteen per cent of zero employee businesses said they would be likely to approach
external finance providers in the next three years.
Major obstacles to the success of the business
The main major obstacles to the success of the business were competition (44 per
cent), regulations/red tape (35 per cent), late payment (26 per cent), taxation (26 per cent)
and obtaining finance (17 per cent).
Of those considering regulations to be a major obstacle, the regulations most likely to be
named were sector specific ones (17 per cent), tax-related (15 per cent), and health and
safety (14 per cent).
Of those that thought taxation was a major obstacle, 56 per cent said it was the level of
taxation that made them think this, and 60 per cent the effort required in compliance. By
contrast, SME employers were more likely to think the level of taxation the major obstacle
rather than the effort required in compliance.
Nineteen per cent of zero employee businesses had sought external advice or
information in the previous 12 months. This proportion was 28 per cent among registered
zero employee businesses, and 16 per cent among unregistered businesses. By sector,
advice or information was more likely than average to be sought in primary (31 per cent),
professional/scientific (29 per cent), financial/real estate (26 per cent) and
information/communication (25 per cent).
In England and Wales2
, 11 per cent of zero employee businesses had sought any external
information, and eight per cent any external advice.
In England and Wales, external advice was mainly sought for business growth (34 per
cent of those seeking it), for marketing (18 per cent), to improve business efficiency (14
per cent) or financial advice for the general running of the business was sought (14 per
cent). Twenty-five per cent of those that sought advice approached accountants, 19 per
cent consultants, and 18 per cent business networks.
In England and Wales, external information was mainly sought for the general running of
the business (23 per cent) and for taxation queries (18 per cent). Information was most
likely to have been sought from accountants (31 per cent), business networks (15 per
cent) and via internet searches (ten per cent).
In England and Wales, 63 per cent of external advice, and 48 per cent of external
information, was delivered face-to-face.
Forty-seven per cent of zero employee businesses in England and Wales paid for advice.
The median average amount paid was Â£750.
Four per cent of zero employee businesses in England and Wales had had opportunities,
difficulties or important information or advice needs that they did not get external advice
or support for in the previous 12 months.
2 Information and advice were split out in England and Wales, but not in Scotland and Northern Ireland.
Forty-seven per cent of businesses with no employees aimed to grow the sales over the
next three years. This compares with 69 per cent of SME employers. Registered zero
employee businesses were more likely to want to grow sales (53 per cent) than
unregistered businesses (45 per cent).
Fourteen per cent of zero employee businesses anticipated the closure of their business
in the next five years, while a further five per cent anticipated the full transfer of
ownership. The proportion anticipating closure was much higher than for SME employers
(four per cent).
In terms of planned growth-related activities over the next three years, 40 per cent of
zero employee businesses plan to increase the skills of the owners, 32 per cent plan to
develop and launch new products or services, 28 per cent plan to introduce new working
practices, 24 per cent plant to invest in premises, machinery or other types of capital
investment, and 17 per cent plan to increase the leadership capability of managers.