London’s micro businesses are a force to be reckoned with, a new report commissioned by London Councils from the Centre for Economic and Business Research (CEBR) shows.
London has over 1 million businesses in total, but this research has shone a light on the more than half a million businesses across the capital that have a large enough economic footprint to have registered for VAT or PAYE and make the biggest contribution to London’s economy. Of these registered businesses, more than 85% are micro businesses employing up to 9 people.
The report finds that London’s micro businesses have grown 50% between 2010 and 2018. Even London’s finance and insurance industries, traditionally seen as dominated by large companies, have significant micro business communities – 58% of the capital’s workplaces in these industries employ fewer than 10 people.
London’s registered non-financial micro businesses generated more than £210 billion in turnover in 2018. That’s £475,000 per business on average and one fifth of the £1.06 trillion total turnover of all London non-financial businesses.
CEBR’s research will inform London Councils’ and London boroughs’ work to build the capital’s business base further. Despite their success, micro businesses are facing serious challenges, such as recruitment and finding suitable affordable office space.
Cllr Clare Coghill, London Councils’ Executive member for Business, Europe and Good Growth, said:
“This in-depth look at London’s micro businesses shows they are punching above their weight, playing a key role in driving London’s economic growth across a wide variety of sectors and creating thousands of job opportunities.
“London boroughs are committed to working with our local micro businesses so we can better support them – especially ones that are looking to scale up and play their role in building an economy that works for all Londoners.
“Our research with CEBR has given us insights into how boroughs can do more for local businesses – such as ensuring they have access to affordable workspace and skilled workers.”