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Peer2Peer Finance News | September 19, 2019

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Value of SMEs vastly underestimated

Value of SMEs vastly underestimated
John Fitzsimons

A NEW survey from the British Business Bank (BBB) has revealed the vast majority of the nation significantly underestimates the scale of small businesses in the UK.

Research by ICM, commissioned by the BBB, found that just two per cent of the general public realise that small businesses make up more than 99 per cent of the total number of businesses in the UK.

Read more: Small businesses turn to alternative finance to fund growth

Three in four respondents suggested that small businesses account for less than 60 per cent of the UK’s business population.

As well as the numbers of small business, their contribution is also being vastly undervalued, the study found. While small businesses contribute £1.3trn – around 33 per cent – of the overall private sector turnover, just one in five (21 per cent) of respondents guessed correctly. All other respondents thought it was lower.

Read more: Funding Circle: Small businesses braced for higher costs after Brexit

Mike Cherry, national chairman of the Federation of Small Businesses, said that small firms are the “unsung heroes” of UK society.

“It’s critical that we rally UK-wide support for small business owners and the self-employed so they can go on contributing more than £1trn to the economy annually,” he added.

The fifth Small Business Saturday, a day encouraging people to use and support small businesses, is being held on 2 December, while the BBB is running a Small Wonders campaign to highlight the contributions of small businesses until the day before.

Read more: How rising inflation will impact small businesses