Business planning

Britain’s small business economy predicted to be worth 241bn by 2025

Entrepreneurs across ten major British cities will generate 241bn a year by 2025, according to new findings that indicate the growing’statusof the small business economy.

The study, compiled jointly by challenger lender Hamphire Bank Trust and the Centre for Economics and Business Research (CEBR) think tank, suggested that the economic value of small firms would increase by almost a fifth over the nine-year period.

The findings also hinted at a slight rebalance of the economy away from London, with entrepreneurs in Greater Manchester and Leeds adding over a quarter to their current economic value by 2025 the fastest growth out of the ten most productive cities.

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Bristol sat third in table, as small business owners confidently predicted they would add 1bn onto the 4bn generated in 2016.

At 181bn, small business owners in the capital would still be worth ten times that of those in Greater Manchester in 2025. However, the study also uncovered the impact of Brexit on growth expectations, seen most strongly in London.

Overall, a third of survey respondents believed their profit potential had been pegged back since the EU referendum in June 2016. In London, closer to half believed Brexit would have a detrimental impact on their business.

2016 to 2025 forecast of Britain’s small business economy

City	2016 contribution	2025 contribution	per cent change 2016 2025
Greater Manchester	£13bn (£13, 373, 718, 500)	£17bn (£16, 835, 047, 500)	26 per cent
Leeds	£5bn (£5, 435, 544, 700)	£7bn (£6, 844, 605, 500)	26 per cent
Bristol	£4bn (£3, 839, 627, 800)	£5bn (£4, 741, 697, 300)	23 per cent
London	£152bn (£152, 164, 339, 800)	£181bn (£180, 972, 040, 900)	19 per cent
Tyneside	£5bn (£5, 187, 149, 100)	£6bn (£6, 170, 773, 300)	19 per cent
Birmingham	£6bn (£6, 426, 096, 700)	£8bn (£7, 612, 653, 900)	18 per cent
Edinburgh	£4bn (£4, 450, 399, 200)	£5bn (£5, 253, 973, 100)	18 per cent
Glasgow	£5bn (£5, 157, 719, 900)	£6bn (£6, 103, 088, 100)	18 per cent
Cardiff	£3bn (£2, 602, 141, 500)	£3bn (£3, 007, 878, 100)	16 per cent
Sheffield	£3bn (£3, 457, 445, 600)	£4bn (£3, 933, 334, 100)	14 per cent
Total	£202bn (£202, 094, 182, 800)	£241bn? (£241, 475, 091, 800)	19 per cent

The same study was undertaken in 2016, when the small business economy was forecast to be worth 217bn by 2020. At 219bn, the latest analysis proved owners had upped their growth ambitions.

Commenting on the findings, Mark Sismey-Durrant, chief executive at Hampshire Trust Bank, said the strong growth forecasts served as a critical reminder? of how important the small business economy was to the UK’s success.

we also should note from our study the lowering in confidence amongst some SMEs, he warned.