Figures released by the Small Business Service show that the number of small enterprises in the UK has grown to a staggering four million.

This year’s statistics represent the highest year on year increase in business stock since the figures were first collected in 1995.

The contribution made by small enterprises to the economy was also established, with small to medium-sized businesses accounting for 99.8 per cent of the business population with an annual turnover of £2.2 billion.

Growth in the sector has led to annual increases in the number of UK small business, with 3.7 million in 2001, 3.8 million in 2002 and 4 million in 2003.

Figures show that there has been a net increase of around 200,000 UK firms in 2003, equivalent to over 500 new businesses starting up every day.

Welcoming the figures, Enterprise Minister Nigel Griffiths said,
“Small and medium sizes businesses are the engine room of the UK economy.

“They account for 99.8 per cent of the business population, employ over 12.6 million people and contribute more than £1 trillion in turn-over. I am delighted that the sector is growing as a whole and that an unprecedented number of new businesses have been set up.”

The findings suggest that despite increasing levels of red tape and increased taxation, entrepreneurs are still determined to make their business work.

Comparisons made between today’s figures and entrepreneurs who found it difficult to succeed even during the ‘booming’ eighties reveals that present day entrepreneurs are more prepared when going it alone.

Richard Wilson, Head of Business Policy at the Institute of Directors (IoD), said, “I think people are better able to run their own business than in the eighties. People have learnt from mistakes made concerning high levels of credit and debt.

There is of course remaining levels of debt but now interest rates are much lower.”

The increased number of small businesses has surprised many who believed the recent economic down turn combined with ever increasing red tape would have left many potential entrepreneurs feeling daunted.

Wilson said, “I must admit I would be very surprised if there was another big increase next year. The two forces working against the small business is the burden of taxation and frustrating levels of regulation.

“Anything the government can do to keep taxation low will be good for small businesses.

“Many employers meet complications when they begin to take on staff in terms of sorting out pay as well as employment law.”