UK Ranks as the Country with the Most Small Businesses in Europe

Despite the pandemic, the world has seen an increase in ‘micro enterprises’ — with a new study showing the UK ranks #1 for 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: GermanyPolandRomaniaPortugal, 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.