UK Ranks as the Country with the Most Small Businesses in Europe
The number of small businesses has skyrocketed in the past year. With a wave of redundancies and furloughing alongside spending more time at home, people took the opportunity to set up their own small businesses. This has meant that the world has seen an increase in ‘micro enterprises’ — businesses with less than 10 employees.
Interested in finding out which countries are the best at producing lasting micro enterprises, UK-based price comparison website money.co.uk investigated the performance of businesses with one to nine employees in 28 different European countries to find out what percentage of these businesses survived a five-year period.
It turns out that the UK is home to the largest number of micro enterprises in Europe that have survived five years.
United Kingdom ranks top for small businesses
The UK created a whopping 265,255 micro enterprises with one to nine employees in 2013, of which an incredible 114,590 survived five years.
Although this means that the UK has a five-year survival rate for its micro enterprises of 43%, their surviving businesses more than double those of any other country.
Despite survival rates fluctuating by around 30% from the best to worst countries, the study also sought to find out which countries produced the most businesses that survived the five-year period.
Countries with the most micro enterprises
The countries with the highest total number of businesses surviving 5 years are UK, Turkey, and France:
Country
Micro enterprises survived five years
#1
United Kingdom
114,590
#2
Turkey
56,395
#3
France
35,060
#4
Italy
31,211
#5
Spain
28,612
Completing the top 10 countries with the most businesses that survived 5 years are: Germany, Poland, Romania, Portugal, and Slovakia, in that order.
Best countries for micro enterprise survival rates
The researchers found that the best country for the survival of micro enterprises is France. Over a five-year period, France boasts a business survival rate of 75%. In 2013, the country produced 46,549 micro enterprises, of which 35,060 were still running five years later.
The second most successful country is Sweden with a five-year survival rate of 73%. In 2013, the country produced 17,574 micro enterprises, of which 12,908 survived the five-year period.
Coming third is Slovakia with a survival rate of 70% for micro enterprises. Slovakia produced 18,949 micro businesses in 2013, of which 13,328 survived five years.
The full rankings for both survival rates and total businesses survived are in the table below.
Country
Micro enterprises birthed in 2013
Micro enterprises survived until 2018
Five-year survival rate
#1
France
46,549
35,060
75%
#2
Sweden
17,574
12,908
73%
#3
Slovakia
18,949
13,328
70%
#4
Netherlands
7,032
4,610
66%
#5
Czechia
8,680
5,533
64%
#6
Luxembourg
1,247
770
62%
=#7
Belgium
5,905
3,527
60%
=#7
Portugal
22,339
13,334
60%
#9
Lithuania
4,518
2,675
59%
#10
Finland
5,088
2,955
58%
Worst countries for micro enterprise survival
The country with the lowest five-year survival rate is Denmark. Despite over 8,000 micro enterprises being created in 2013, only 3,458 survived the five-year period, leaving Denmark with a survival rate of just 42%.
The United Kingdom ranks second lowest, with a survival rate of 43%. However, the UK was home to the most businesses that survived five years – a whopping 114,590, twice as many as any other country.
Ranking third from bottom is Poland with a survival rate of 44%. The country produced nearly 36,000 micro enterprises, but less than 16,000 survived five years.
Country
Micro enterprises birthed in 2013
Micro enterprises survived until 2018
Five-year survival rate
#1
Denmark
8,213
3,458
42%
#2
United Kingdom
265,255
114,590
43%
#3
Poland
35,988
15,946
44%
#4
Iceland
929
420
45%
#5
Turkey
123,799
56,395
46%
#6
Germany
44,163
20,820
47%
#7
Estonia
2,574
1,236
48%
=#8
Romania
28,970
14,913
51%
=#8
Italy
60,607
31,211
51%
=#10
Switzerland
12,334
6,363
52%
=#10
Spain
55,329
28,612
52%
=#10
Hungary
25,314
13,248
52%
Salman Haqqi, personal finance expert at money.co.uk, commented on the findings:
“Many businesses have undoubtedly felt the negative impact of the pandemic on profits, but the last 18 months have also seen an increase in the number of small businesses around the world.
Our analysis of the latest Eurostat figures shows that there are a handful of countries in Europe where the chances of survival are higher than others, specifically in France, Sweden, and Slovakia. Small businesses in these three countries have the highest survival rate on the continent, with over 70% of businesses passing the five-year mark - a vital marker for many businesses.
While there are many ways small businesses can fund themselves - including investors and personal savings, some entrepreneurs may take out a business loan. As with all loans, it’s important to remember that any money borrowed needs to be paid back, with interest, over a set time period, and missed or late payments can affect your credit score.”
The researchers utilized the latest data available on Eurostat (2018) for Business demography by size class. Ireland, Greece, Cyprus, Malta, North Macedonia and Serbia were omitted from the findings due to insufficient data across a five-year period.
