Why supporting SMEs is essential to rebuilding the UK’s economy

As we head towards the next stage of easing coronavirus restrictions, we are sure many of you are planning your well over-due nights out with friends or maybe even a holiday as we enter a state of ‘normality’. We’re here to give you a few reasons why supporting SMEs is essential to rebuilding the UK’s economy as we begin to get back on track.

Whether you plan to stay local or explore somewhere further afield, take a moment to think about how you can support the recovery of small businesses across the UK. It’s important that we all do our bit to support SMEs in particular in this time of need as it goes without saying that they have been hit the hardest over the last 12 months.

Why are SMEs important to the UK economy?

First of all, here’s an insight into how SMEs are a large contributor our economic landscape. The number of private sector businesses has risen in the UK over the last 18 years by 2.2 million. SMEs contributed 47% annual turnover to the UK economy as of 2016. However, that has now increased to £2.3 trillion (52%) since then.

The relative importance of small businesses is increasing with these businesses making up 16.3 million; 60% of total private sector jobs. Compared to large organisations which identify as having over 250 employees. SMEs make up 99.9% of all businesses in the UK, 96% of which are micro-businesses, employing no more than 10 people, leaving just 0.1% for large organisations. From this, it is clear to see that small businesses are of significant importance for the future of the UK and its economy.

Why support SMEs?

It’s not just about the recovery of the economy that urges us to support small businesses right now, there are many factors that contribute too which are of benefit to you and the businesses involved.

Support jobs

SMEs account for 99.3 % of total businesses and three fifths of UK employment, which is more than most people would think, but every local job that is created means that more people are able to live and work in their local community. Although the government furlough scheme has been a financial saviour for small businesses that have been unable to pay their employees during the pandemic due to temporary closures, unfortunately, some people have also lost jobs along the way.

As businesses begin to trade again, spending money in independently owned shops, restaurants and everything in between will boost profits enabling jobs to be created or re-created as the case may be.  Also, the reason people often move out of small towns and cities is for better job opportunities. However, a town or city with a thriving small business environment encourages people to stay, creating a close-knit community for the future.

Boost local communities

Local businesses tend to support other local businesses. A restaurant may need cleaning services, food and drink suppliers, or an accountant. More often than not, an SME will deliberately purchase from other local businesses to create a thriving local economy.

Bolstering sales of their friends and neighbours creates strong community bonds and keeps money in the community. Research shows that spending £10 at a small business generates an additional £50 in the local economy. Impressive!

Unique experiences

Small business owners treasure the relationships they have with all of their customers. Because these small businesses value the support of their customers. Whether you’re a local customer or a first-time buyer, you are guaranteed to receive a brilliant service from SMEs that oozes personality and character, making every moment of your experience memorable. SME owners enjoy getting to know their customers, since they’re all an important part of the community they serve.

More than anything, word of mouth counts when it comes to small business advertising, so expect to be greeted with smiling faces and passionate people when you shop. This positive experience will keep you coming back, which is a win-win for everyone involved.

Supporting an SME gives you a warm feeling in your heart!

The feeling you get when you know you have just contributed to someone’s dream come true can be enough motivation to support them.

If you are an SME looking for funding and want to have a positive contribution to your local economy click here to find out more.

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