Despite challenging conditions, the number of UK digital micro businesses turning over more than £100,000 a year grew substantially during 2023, and almost a fifth (17%) now bring in six-figure sums, according to new figures published this week.
- Almost a fifth of (17%) UK micro businesses – those with 1-9 employees – which operate online now have an annual turnover of over £100,000, according to a new study.
- This is up from 11% in 2022 – a 55% increase – as four in five (84%) owners hitting six-figure earnings say they are optimistic for further growth.
- Findings show the benefits for bricks and mortar entrepreneurs to also sell online through a website.
The findings come from Venture Forward, a multi-year research initiative by GoDaddy that analyses data from more than half a million UK digital micro businesses – typically those with fewer than 10 employees. It shows resilience from UK entrepreneurs during the soaring cost-of-living with the number of micro businesses turning over more than £100,000 being up from 11% last year.
The growth is similar for micro businesses bringing in over £50,000, which stands at 33% today compared with 25% last year. In comparison, the median annual earnings for full-time employees in the UK was approximately £34,963 in 2023.
GoDaddy's data shows the value of ecommerce for fast-growth businesses. 55% of entrepreneurs who own micro businesses that are turning over more than £100,000 annually say that their website provides the main source of their income. A fifth (21%) invested their initial capital into a website when launching their venture, underlining the importance of digital infrastructure.
Of businesses that are now turning over more than £100,000 a year, over half (54%) were started in the past three years, demonstrating the speed at which successful digital businesses can be built.
Many digital micro businesses required relatively small initial investments – 43% were started with less than £5,000 of initial capital, as digital tools reduce the barriers to entry entrepreneurs looking to start a new venture. Remarkably, one in five (21%) said their company cost them as little as £500 to create.
Ecommerce platforms enable bricks-and-mortar only entrepreneurs to enlarge their catchment area, reaching a wider selection of customers, selling in more ways and becoming truly unstoppable. A website also means the business can run 24/7 without the need for employees to man the shop, so sales can take place outside of opening hours.
The opportunities offered by setting up an online presence are likely to continue in 2024, as:
- Over four fifths (83%) of people who own +£100,000 micro businesses are optimistic for growth.
- In contrast, just one in five (22%) say they are confident in the UK economy as a whole.
- 1 in 3 micro businesses in the UK are 'breadwinners', contributing 51% or more to household income.
- About 1 in 4 women with a micro business in the UK are the 'breadwinners' in their home.
The GoDaddy data shows that six-figure turnovers take time – but not necessarily money – to achieve. Over half (58%) of owners with £100,000-a-year micro businesses work over 40 hours a week on their venture, whilst only 27% of all micro business owners said they do the same.
"It is remarkable to see that so many entrepreneurs have built six figure businesses – many with very minor initial investment – and that the trend is going upwards, as we've seen an increase of 55% on digital microbusinesses bringing in over £100,000 revenue. It is testament to the strength of Britian's small business community, and the fact that British entrepreneurs really are unstoppable.
"Entrepreneurs who operate bricks and mortar only businesses are potentially missing out on huge growth at minimal cost, so there has never been a better time to diversify and sell in more ways." Andrew Gradon, Head of GoDaddy UK & Ireland
About Venture Forward
Venture Forward is a multi-year research initiative, which analyses data from 680,000 British micro businesses – conducted by GoDaddy to quantify the impact of millions of micro businesses on the U.K. economy and their local communities.
About GoDaddy
GoDaddy helps millions of entrepreneurs globally start, grow, and scale their businesses. People come to GoDaddy to name their idea, build a professional website, attract customers, sell their products and services, and accept payments online and in-person. GoDaddy’s easy-to-use tools help micro business owners manage everything in one place and its expert guides are available to provide assistance 24/7.
Submitted by Joshua Powell, MHP Group.