The smallest businesses in England fared best during the recent economic downturn, with survival rates significantly better than their larger counterparts, new research has revealed.
A study by data firm Marketscan found that the decline in micro-businesses, that have between one and nine employees, was less than companies of all other sizes.
While the total number of businesses shrunk by 48 per cent in the year up to April 2004, the smallest firms suffered just a 43 per cent drop.
With the economy now beginning to recover and record numbers of people keen to start up their own business, the research will make fairly encouraging reading for budding entrepreneurs.
All English counties experienced a drop in micro-businesses, although there were vast differences in failure rates among the regions.
In Derbyshire, just two per cent of small firms went out of business over the 12 months, while in North Humberside 57 per cent went bust.
Julie Knight, managing director of Marketscan, said that while Britain has avoided slipping into actual recession, the economic downturn has been considerable.
“Given that micro-businesses tend to be more exposed to internal and external market trends than international corporations, it seems surprising that they have fared better than larger businesses.
“This robustness may be partly attributed to the fact that many are service-based and can be more nimble, as they are able to strip out costs when necessary and absorb the impact of reduced profitability,” she said.
