3 minutes read

The UK’s small business landscape is overwhelmingly white. According to the latest Government figures, just 6% of small to medium sized enterprises (SMEs) that employ at least one person are led by people of minority ethnic groups (MEG). Of them, only 11% are run by Black entrepreneurs. That’s an estimated 9,321 Black-led employers out of 5.6 million SMEs in total - just 0.167% of the SME population. 

From small businesses to medium sized businesses 

Micro and small businesses (with 1–9 and 10–49 employees, respectively) play a crucial role in the UK economy. However, there is a pressing need for more medium-sized enterprises overall—and particularly more Black-led medium-sized firms.

According to BDO, a business advisory firm, medium-sized businesses (50–249 employees) employed 7.6 million people in 2019, surpassing both small businesses (1.6 million) and the FTSE 350 companies (6.9 million). This underscores their critical role as the driving force of the UK economy. Yet, Black entrepreneurs remain largely underrepresented in this vital sector.

Based on the latest UK government data, there are an estimated only 200 Black-led medium-sized firms. The vast majority of Black-led employer businesses are either micro enterprises (around 7,670) or small businesses (1,390). Limited access to business advice and finance likely hinders their growth, restricting their ability to scale and contribute more significantly to job creation and the wider economy.

Black Entrepreneurs: High Investment, Low Returns

Black entrepreneurs invest more time and money than any other ethnic group in developing a basic business idea. However, they experience the poorest business outcomes, with a median annual turnover of £25,000, significantly lower than £40,000 for Asian and other ethnic minority entrepreneurs. Their labour productivity also lags behind, at £13,125 per year, compared to £22,222 for white entrepreneurs. While even the smallest businesses contribute to their local communities, better access to resources and support could enable these highly motivated entrepreneurs to achieve far greater economic impact.