By Daniel Hunter
The UKs small businesses are driving an estimated £1,000 billion through their local economies each year, according to research by Clydesdale and Yorkshire Banks.
The new research by the banks looked at the economic impact and involvement of small and medium sized enterprises (SMEs) on their local areas. Their survey of SMEs found that more than half (57%) used suppliers all or mostly from within a 10mile radius of their business.
According to the banks’ research, over half of SMEs are sourcing from within 10 miles, and a further 30% are looking no more than 25 miles away; the recirculation of money within the local economy is potentially enormous. In addition, the SMEs surveyed stated that half the business they do is with local customers, people from within 10 miles, meaning that they are bringing in billions of pounds to their economies from outside the area.
UK SMEs turnover around £1,500 billion each year, with around two-thirds of that estimated to stay in the immediate vicinity; Clydesdale and Yorkshire Banks calculate that the impact of this local investment is around £1,000 billion for those economies.
On average, each of the UKs 4.5million small businesses is responsible for employing 3 people, and generates a turnover of roughly £330,000 each year.
While the evidence from the research suggests that SMEs are doing the majority of their business locally, a significant number are combining this with their use of the internet. A quarter of those questioned said that relied on the internet to do most of their business.
“Small businesses are the very heart of local communities and the life-blood of their economies, from the newsagent to the garage owner to the family-run manufacturer or engineering firm. Our economy is reliant on them to generate wealth and jobs," Paul Shephard, Director of Business & Private Banking at Clydesdale and Yorkshire Banks, said.
“These businesses may be small, but they are responsible for almost two thirds of jobs and half the turnover of all British business. The success of these small businesses, from the sole trader upwards, is the key to growth not just in local economies, but in the recovery of the UK as a whole.”
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