Official Statistics

Longitudinal Small Business Survey 2024: businesses with no employees

Published 25 September 2025

1. Headline findings

This edition of the Longitudinal Small Business Survey (LSBS) is the 10th Wave that has been completed since 2015. The report covers a broad range of topics that provide insights on small and medium enterprise (SME) performance and the factors that affect this. This report presents results for businesses with no employees.

In 2024, businesses with no employees were more likely to be aiming for growth in sales in the short to medium term, with higher levels of expectation of taking on employees than previously.

While in 2024, fewer businesses with no employees than in 2023 were using finance at the time they were surveyed, they were more likely than previously to have applied for finance in the last 12 months. There was a significant increase in applications for bank overdrafts in 2024.

In 2024, competition in the market overtook the level of energy prices as the most frequently mentioned obstacle to business success among businesses with no employees.

There was greater use of technology by businesses with no employees in 2024, compared with 2023.

2. Summary of highlights from sections

2.1 Business performance

In 2024, 14% of businesses with no employees had previously employed at least one person at the same time last year, which was five percentage points higher than 2022 and 2023. There was also a significant increase in expectations of employment growth for the next 12 months in 2024 compared with previously (18%, compared with 12% in 2023).

In 2024, 27% of businesses with no employees reported growth in annual sales (turnover) over the preceding 12 months, a decrease compared with 2023 (32%) and 2022 (35%). A higher proportion of businesses with no employees (32%) reported a fall in turnover during this period (31% in 2023). 

In 2024, there was an increase in businesses with no employees with aims to grow sales over the next three years, (59% in 2024, compared to 50% in 2023 and 2022).

2.2 Exporting

There was an increase in the proportion of businesses with no employees who had exported goods or services in the last 12 months, 16% compared with 12% in 2023, and 11% in 2022.

Some 36% of businesses with no employees that exported planned to increase their level of exports over the next few years, which was a significant decrease compared with 2023 (49%).

Businesses with no employees were less likely than SME employers to import (13%, compared with 23% of SME employers), and there was little change in the propensity to do so among businesses with no employees year on year (14% in both 2023 and 2022).

2.3 Access to external finance

Some 49% of businesses with no employees were using some form of finance (58% in 2023 and 57% in 2022).

Around 12% of businesses with no employees sought external finance in 2024, an increase on 2023 (8%) and 2022 (7%). The propensity to have done so was at the highest level since the survey began in 2015. There was a significant increase in applications for a bank overdraft facility compared to 2023 (45% in 2024 and 30% in 2023).

Businesses with no employees were less likely to report giving customers trade credit in 2024 than in 2023 (27% compared with 37%), and much less likely to have done so than SME employers (47%). Those that offered credit were less likely than SME employers to report late payment as a problem (51%, compared with 57%), but the gap has closed a little in 2024, compared with previously (48% and 59% respectively in 2023).

2.4 Innovation activity

In 2024, as in 2023, 26% of businesses with no employees had introduced new or significantly improved goods or services in the last three years. There was an increase in innovating businesses with no employees that had introduced goods or services that were new to the market compared with previously (33% in 2024, 30% in 2023, 24% in 2022).

2.5 Major obstacles to the success of the business

In 2024, competition in the market overtook the level of energy prices as the most frequently mentioned obstacle to business success among businesses with no employees (35% and 32% respectively, compared with 37% and 48% respectively in 2023).

2.6 Business support

Businesses with no employees continue to be less likely to have sought business information and advice than SME employers in 2024 (17%, compared to 27%) and there has been little change since 2019 (16% from 2019 to 2023).

2.7 Taxation

Of all businesses with no employees who were categorised as sole proprietors or partnerships, 82% reported that they were liable to submit returns to HMRC for income tax self-assessment. This compares with 80% of SME employers.

2.8 Technology

In 2024, 53% of businesses with no employees used technologies or web-based software to sell to customers or to manage the business, which was a significant increase on 2023 (44%). They were still less likely to have done so than SME employers (69% in 2024).

2.9 Future plans

Among the 51% of businesses with no employees with plans to undertake growth-related activities, 53% reported that plans had been affected by rising costs (55% in 2023). The most significant issue for both businesses with no employees and SME employers that were affected was cost increases other than increased energy costs (64% and 81% respectively), while increased energy costs was cited as an issue by a higher proportion than in 2023 (55% and 44% respectively).

2.10 Disability-led businesses

Measured for the first time in 2024, 6% of businesses with no employees were led by someone with a disability, which compared with 2% of SME employers.

3. What you need to know about these statistics

The Longitudinal Small Business Survey (LSBS) is a telephone survey of UK businesses in the private sector with fewer than 250 employees. (This definition treats full-time and part-time employees equally.) This report summarises key findings from the 2024 survey (Year 10). It focuses on those businesses with no employees (non-employers’), with a separate report on SME employers.

Separate reports are published because we use three separate sampling frames and because the estimates for businesses with no employees include a large proportion of businesses which are not registered for VAT or PAYE. For the SME employers we use the Interdepartmental Business Register from the Office for National Statistics, which has complete coverage of the population from VAT and PAYE records, whereas for the sample of business with no employees we use the IDBR, and both a commercial data provider and from the 2024 survey a commercial panel to include businesses not registered for VAT or PAYE.

The coverage of the unregistered business population is less well understood and small business who rely on word of mouth or platforms such as Facebook or Instagram are unlikely to be included in either of the sampling frames and therefore this should be considered when making comparison between the two reports. There is some guidance at the back of the report on the uncertainty that arises because we are using a sample of the UK SME population rather than collecting data from all of them. We refer to micro businesses which have 1-9 employees; small businesses which have 10-49 employees; and medium-sized businesses which have 50-249 employees.

In this report when we refer to business size this is defined entirely in terms of number of employees. Levels of turnover (sales) or assets are not part of our definition, though there are other definitions of business size which include these.

‘SMEs’ stands for ‘small and medium enterprises’ – but this is always taken to include micro businesses and non-employers too. The LSBS covers all SMEs, not just small businesses, though this report only covers non-employers.

This is a longitudinal survey as we try to re-interview businesses (SME employers and businesses with no employees) each year – 348 businesses have taken part in all ten years of the survey so far and another 6,304 businesses in 2024 had taken part in at least one previous survey (‘panellists’). In addition, there were 3,381 businesses new to the survey (‘top-ups’). The overall LSBS sample in 2024 was 10,611, including 2,192 businesses with no employees on which this report is based.

Throughout the report, where figures sum to less than 100% when you expect them to sum to 100% (because they cover all possibilities) the shortfall will be due to businesses saying they did not know the answer, refusing to answer or might be due to rounding of estimates to the nearest whole percentage.

Our respondents were each randomly assigned to one of three cohorts – A, B or C, and some questions were only asked of one cohort (though most questions went to all three cohorts). The underlying data tables that accompany this report group cohort questions separately, so the report and charts make clear when they are covering cohort questions, to allow you to find the corresponding data table if required.

4. Business performance

4.1 Changes in the levels of employment

In the data tables accompanying this publication, table 37 shows how many employees businesses had on their payrolls across all UK sites 12 months before their interview and table 38 shows how the size of the workforce has changed over the last 12 months.

An estimated 14% of businesses with no employees employed at least one person 12 months previously, which is five percentage points higher than from 2021 to 2023. If the business had no employees at the time of the interview it is included in this report, even if it had employees 12 months earlier.

Figure 1: proportion of businesses with no employees who employed at least one person 12 months previously, by year

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Unregistered businesses were less likely to have had at least one employee a year ago than those that were registered (11% compared with 19%).

By sector, businesses in construction (22%) were most likely to have reduced their employment levels, while those in education (6%) were least likely to have done so.

4.2 Expectations for employment growth

In the data tables accompanying this publication, table 40 shows whether the business expects to have employees in 12 months’ time.

Some 18% of businesses with no employees expected to increase employment in a year’s time (six percentage points higher than in 2023, and seven percentage points higher than in 2020, 2021 and 2022), while 79% expected no change.

Figure 2: proportion of businesses with no employees who expected to employ at least one person in 12 months’ time, by year

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There was little difference between unregistered and registered businesses without employees in this respect (18% and 17% respectively).

By sector, businesses in manufacturing (25%), administration (25%) and construction (23%) were more likely to expect to employ people, while those in information and communications (11%), primary (12%) and health (12%) sectors were least likely to expect to do so.

4.3 Changes in levels of turnover

In the data tables accompanying this publication, table 124 shows the change in turnover compared with 12 months ago.

Around 27% of businesses with no employees (that had traded for at least one year) reported growth in turnover (value of sales) since the previous year, while a higher proportion reported a decrease (32%). However, businesses with no employees were most likely to report no change over the last 12 months (37%). Compared to 2023, there was a five percentage points decrease in businesses with no employees that reported turnover growth in the last 12 months, and this year’s figure is closer to that reported pre-pandemic (2019).

By nation, businesses with no employees in Wales were less likely than those in other nations to report an increase in turnover over the past year (18%, down six percentage points on 2023), while those in Scotland were most likely to do so (34%, down three percentage points on 2023). This compares with 27% in both England (down five percentage points on 2023) and Northern Ireland (up two percentage points). Businesses with no employees in Northern Ireland were least likely to report a reduction in turnover at 16% (down three percentage points on 2023), compared with 34% in Wales (up eight percentage points), 33% in England (up one percentage point) and 28% in Scotland (up three percentage points).

Businesses with no employees in the health sector (37%) were the most likely to report growth in turnover, while those in administration were least likely to report a decrease in turnover (25%).

Figure 3: current turnover compared to 12 months previously, by year (based on businesses with no employees trading for at least a year)

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4.4 Expectations of turnover in 12 months’ time

In the data tables accompanying this publication, table 128 shows the expected change in turnover in 12 months’ time.

Compared with 27% of businesses with no employees that reported an increase in turnover over the last 12 months, 32% expected an increase in turnover in the next 12 months (up four percentage points on 2023, and up eight percentage points on 2022). Fewer expected a decrease in turnover than reported a decrease in the last 12 months (18%, down one percentage point on 2023), and 45% expected turnover to remain at similar levels over the next year (down five percentage points on 2023 and down nine percentage points on 2022).

Unregistered and registered businesses with no employees differed little from each other in this respect, with 31% of unregistered businesses expecting turnover to increase over the next year, compared to 32% of registered businesses, and 16% expecting turnover to decrease, compared to 20% of registered businesses (46% and 44% respectively expected no change).

By sector, businesses with no employees in manufacturing and finance and real estate sectors were most likely to expect turnover to increase (both 36%), while those in the professional and scientific (23%) sector were most likely to expect a decrease in turnover in the next 12 months.

Figure 4: expectations of turnover in 12 months’ time, by year

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4.5 Profit

In the data tables accompanying this publication, table 132 shows whether the business without employees generated a profit or surplus in the last financial year

In 2024, 69% of businesses with no employees generated a profit or surplus in their last financial year (down four percentage points on 2023 and down six percentage points on 2022). This compares with 77% of SME employers in 2024.

Unregistered businesses were less likely to have generated a profit or surplus than registered businesses (68%, compared with 72%).

By sector, businesses with no employees in the professional and scientific (79%, 81% in 2023), financial and real estate (76%, 89% in 2023), and accommodation and food (75%1, 67% in 2023) sectors were most likely to generate a profit or surplus, whilst those in the information and communications sector were least likely to have done so (59%).

Figure 5: percentage of businesses with no employees that generated a profit or surplus in the last financial year, by sector

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5. Exporting

5.1 Sales of goods or services outside the UK in the last year

In the data tables accompanying this publication, tables 41 to 45 show whether businesses exported goods or services.

Overall,16% of businesses with no employees exported goods or services in the last year (an increase of four percentage points on 2023 and five percentage points on 2022). This compared with 17% of SME employers that exported goods or services in the preceding 12 months.

Registered businesses were more likely to have exported than unregistered businesses (19% and 14% respectively), with similar increases on 2023 for both groups (14% and 10% respectively in 2023; 15% of registered and 8% of unregistered businesses respectively in 2022).

Figure 6: whether sold goods or services or licensed products outside the UK in the last 12 months, 2024

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Compared with 2023, there was an increase in businesses with no employees that exported in England (16%, 11% in 2023) and Scotland (16%, 14% in 2023), while there was no change in Wales (13%) and a decrease in exporting in Northern Ireland (13%, 18% in 2023). The decrease in Northern Ireland is despite the prevalence of sales to the Republic of Ireland.

By sector, businesses with no employees that were more likely to export operated in retail and wholesale (34%, 25% in 2023), information and communications (32%, 22% in 2023), manufacturing (30%, 20% in 2023) and arts and entertainment (30%, 20% in 2023), while those least likely to export were in accommodation and food services (1%, 2% in 2023), construction (6%, 2% in 2023), primary (6%, 4% in 2023) and other services (4%, 5% in 2023) sectors.

5.2 Destinations of exports

In the data tables accompanying this publication, table 48 shows the destination of exported goods or services.

Of businesses with no employees that exported in the last year, 59% exported to European Union (EU) countries (68% in 2023), while 73% exported to destinations outside the EU (76% in 2023).

After EU countries, the next most frequently cited export destination was the USA (50%, 53% in  2023), followed by Canada (19%, 18% in 2023), EFTA countries (14% and 18% in 2023), China (8%, 5% in 2023), India (6%, 8% in 2023), Turkey (5%, 2% in 2023) and  South Korea (4%, 3% in 2023). Among businesses that exported, 33% reported exporting to the ‘rest of the world’ (47% in 2023).

5.3 Goods or services imports in the last 12 months (Cohort A only)

In the data tables accompanying this publication, table 2 (Cohort A) shows whether businesses imported goods or services.

In 2024, 13% of businesses with no employees imported goods or services in the previous year. This was one percentage point lower than in 2023 and 2022. This compares with 23% of SME employers.

Registered businesses were more likely to have imported goods or services in the previous year than non-registered businesses (20% compared with 9%).

Figure 7: sources of imports for businesses with no employees

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5.4 Plans to increase exports, start exporting and intermittent exporting (Cohort C)

In the data tables accompanying this publication, table 2 (Cohort C) shows whether businesses have had overseas sales every year, and tables 5, 6 and 7 (Cohort C) show whether businesses planned to start or to increase exporting in the next few years.

In 2024, 36% of current exporters planned to increase their exports over the next few years, which is a 13 percentage points decrease on 2023 and a one percentage point increase on 2022. This compared with 51% of SME employer exporters.

Of businesses with no employees that did not currently export but who had a product or service suitable for exporting, 34% planned to export (a nine percentage points increase on 2023). This equated to 5% of all businesses with no employees and, compared with 3% of SME employers.

Of businesses with no employees that have exported for two years or longer, 67% have had overseas sales every year since they started exporting (a five percentage points increase on 2023), while 25% reported years without overseas sales (8% did not know). Among SME employers who have exported, 73% have made overseas sales every year since they started exporting.

6. Access to external finance

6.1 Types of external finance currently used

In the data tables accompanying this publication, table 65 shows the types of finance that businesses without employees currently use.

Overall, in 2024, 49% of businesses with no employees were using some form of external finance (down nine percentage points on 2023, and down eight percentage points on 2022). It compares with 72% of SME employers (one percentage down on 2023 and down three percentage points on 2022).

Figure 8: percentage of businesses with no employees currently using forms of external finance

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Reflecting the pattern observed previously, registered businesses (65%) were more likely to use external finance than unregistered businesses (40%).

Businesses in the primary (73%), transport and storage (59%) and construction (57%) sectors were most likely to report use of one or more forms of external finance.

Among businesses with no employees the most common forms of external finance used were credit cards (22%), bank overdrafts (20%), loans from a bank, building society or other financial institution (11%), loans from business partners, directors or owners (8%), and leasing or hire purchase (8%).  

In this 2024 survey, forms of external finance linked to the coronavirus (COVID-19) pandemic were removed from the options offered to survey participants, and none were mentioned in the ‘other finance’ category. As such, external finance options reverted to those that were most common pre-coronavirus (COVID-19) pandemic.

As in the last three years, the use of any form of so-called ‘alternative finance’, not originating from banks, the public sector, or people known to the business (in this instance, alternative finance refers to equity, factoring/invoice discounting, peer-to-peer (P2P) loans and some forms of ‘other finance’), was reported by 3% of businesses with no employees (5% of SME employers).

6.2 Whether businesses sought external finance in the last 12 months

In the data tables accompanying this publication, table 69 and 70 shows whether businesses without employees sought external finance in the last 12 months.

Some 12% of businesses with no employees had sought external finance in the last year – four percentage points higher than in 2023, and five percentage points higher than in 2022. Some 8% of businesses with no employees sought external finance once, and 4% more than once. Businesses with no employees were less likely than SME employers to have sought external finance in the last 12 months (15%).

Registered businesses with no employees were more likely to have sought external finance than unregistered businesses (17% and 9% respectively).

By sector, businesses with no employees in the primary (20%), accommodation and food (19%), transport and storage (18%) and retail and wholesale (16%) sectors were the most likely to have applied for finance in the preceding 12 months.

For 42% of businesses with no employees that sought external finance, this was the first time they had done so – up nine percentage points on 2023.

Figure 9: percentage of businesses with no employees that sought external finance in the last year, by year and registration status

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6.3 Type of external finance sought

In the data tables accompanying this publication, table 71 shows the types of external finance sought in the last 12 months.

In 2024, businesses with no employees that sought finance were most likely to have applied for a bank overdraft facility (45%, 30% in 2023). This overtook applications for loans from banks or other financial institutions, which was mentioned by 32% of those that sought external finance, as in 2023. As in 2023, fewer applied for a loan from family or a friend (24%, 21% in 2023)

Also having significantly increased since 2023 was finance from credit cards (28%, 12% in 2023), while fewer than in 2023 applied for leasing or hire purchase (10%, 18% in 2023). In 2024, 11% had applied for Government or local authority finance grants or schemes (14% in 2023), or loans from business partners, directors or owners (10%, the same as in 2023).

The most commonly sought types of finance among businesses with no employees reflect those sought by SME employers (37% of SME employers applied for a bank overdraft facility and 36% applied for a loan from a bank). Businesses with no employees were more likely than SME employers to have applied for credit cards (28%, compared to 17%) and a loan from a family or friend (24%, compared to 12%), while less likely to apply for leasing or hire purchase finance (10%, compared to 20%).

6.4 Intentions to apply for external finance in the next three years

In the data tables accompanying this publication, table 135 shows the likelihood of businesses without employees approaching external finance providers in the next 3 years.

Compared with 2023, nearly twice as many businesses with no employees considered it likely that they would approach external finance providers in the next 3 years (18%, 10% in 2023).  Some 7% said it was very likely, and 11% that it was fairly likely they would do so (5% very likely, 5% fairly likely in 2023).

Reflecting the pattern observed with regard to having sought financial assistance in the past 12 months, registered businesses (21%) were more likely than unregistered businesses (15%) to say it was likely that they would approach external finance providers in the next three years.

Businesses with no employees in finance and real estate (28%), primary (26%) and transport and storage (25%) sectors were most likely to report it likely that they would approach external finance providers in the next three years.

6.5 Trade credit and late payment (Cohort A)

In the data tables accompanying this publication, table 14 (Cohort A) shows whether businesses without employees give customers trade credit and table 17 (Cohort A) shows whether they have experienced problems with late payment.

In 2024, 27% of businesses with no employees reported that they give their customers trade credit (down 10 percentage points on 2023 and down five percentage points on 2022). The provision of trade credit by businesses with no employees is much lower than among SME employers (47%).

Registered businesses were more likely than unregistered businesses to give their customers trade credit (39% compared with 20%).

Trade credit was most likely to be given by businesses in primary (49%) and manufacturing (45%) sectors.

Late payment was considered a problem for 51% of businesses with no employees which gave trade credit, which was three percentage points higher than in 2023 (14% of all businesses with no employees overall – down four percentage points on 2023). This includes 11% that considered it a big problem (two percentage points higher than in 2023).

This compared with 57% of SME employers who gave trade credit who considered late payment a problem (27% of all SME employers).

7. Innovation activity

7.1 New or significantly improved processes in the last three years (Cohort B)

In the data tables accompanying this publication, table 2 (Cohort B) shows whether the business has introduced any new or significantly improved processes in the last three years.

It is estimated that 14% of businesses with no employees had innovated processes for producing or supplying goods or services in the last three years – one percentage point lower than in 2023. In comparison, 19% of SME employers in 2024 innovated processes.

Registered businesses with no employees were more likely to have introduced process improvements than unregistered businesses (17%, compared to 13%). There was no change on 2023.

7.2 New or significantly improved goods or services in the last three years

In the data tables accompanying this publication, tables 88, 89 and 90 show whether the business has introduced any new or significantly improved goods or services in the last three years.

As in 2023, 26% of all businesses with no employees had introduced new or significantly improved goods or services in the last three years. This compared to 29% of SME employers in 2024. There was no difference between registered and unregistered businesses with no employees in this respect (26% and 27% respectively).

By sector, those most likely to have innovated goods or services were in health (39%), manufacturing (37%), information and communications (36%) and education (34%) sectors, whilst those least likely to have done so were in transport and storage (12%), finance and real estate (17%), primary (18%) and construction (18%) sectors.

Figure 10: percentage of businesses with no employees which have introduced new or significantly improved goods or services, by registration status, 2024

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7.3 Innovations which were new to market or industry

In the data tables accompanying this publication, table 91 in the main data tables, and table 4 in the Cohort B data tables show whether the new goods, services or process innovations were new to the industry or business.

Of all businesses with no employees that have introduced new or significantly improved goods and services in the last three years, 33% had introduced goods or services that were new to the market (up three percentage points on 2023 and up nine percentage points on 2022). Of those that had introduced new or significantly improved processes, 26% had introduced processes that were new to their industry (down five percentage points on 2023 and down four percentage points on 2022).

Businesses with no employees within the information and communications sector that introduced new or significantly improved goods or services were most likely to have introduced those new to the market (46%).

Registered businesses were more likely to have innovated in the market (41%) compared to unregistered businesses (28%).

8. Major obstacles to the success of the business (Cohort B)

In the data tables accompanying this publication, table 1 (Cohort B) shows what businesses without employees consider to be the major obstacles to business success.

Figure 11: percentage of businesses with no employees citing each major obstacle to the success of the business, by year

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In 2024, the most frequently mentioned major obstacle to business success mentioned by businesses with no employees was competition (35%), overtaking the level of energy prices for the first time since the option was added in 2022 (32%, 48% in 2023, 52% in 2022). In contrast, SME employers were still more likely to cite energy prices than competition (50% and 40% respectively), but overall, most frequently mentioned taxation (61%), which was cited by 29% of businesses with no employees.

Other obstacles mentioned by around one in four businesses with no employees, included: regulations and red tape (25%, 32% in 2023; 33% in 2022; 44% of SME employers); late payment (22%, 26% in 2023; 24% in 2022; 26% of SME employers in 2023), and the UK’s exit from the EU (22%; 25% in 2023; 23% in 2022; 31% of SME employers).

9. Business support

9.1 Use of external information or advice in the last year

In the data tables accompanying this publication, table 93 shows whether businesses with no employees have used external information or advice in the last 12 months.

In 2024, 17% of businesses with no employees reported seeking external information or advice (i.e. more than just a casual conversation) in the preceding 12 months, a one percentage point increase compared with the period 2019 to 2023.  This compared with 27% of SME employers in 2024, among whom there was also a one percentage point increase on 2023.

As seen previously, registered businesses (22%) were more likely to have sought information or advice than unregistered businesses (15%). Compared with 2023, there was a three percentage points decrease among registered businesses and a two percentage points increase among unregistered businesses.

Businesses with no employees in the primary sectors were the most likely to have sought information and advice (38%), followed by those in the financial and real estate (29%) and professional and scientific (24%) sectors.

9.2 Purpose of information and strategic advice sought

In the data tables accompanying this publication, table 95 details reasons why businesses with no employees sought information or strategic advice in the preceding 12 months.

In 2024, businesses without employees were most likely to have sought information or advice on:

• business growth (34%, 21% in 2023; 23% of SME employers in 2024)
• marketing (22%, 15% in 2023; 11% of SME employers)
• financial advice for accounting and general running of the business (21%, 23% in 2023; 25% of SME employers)
• tax and national insurance law and payments (16%, 11% in 2023; 12% of SME employers)
• E-commerce and technology (14%, 6% in 2023; 5% of SME employers)
• improving business efficiency and productivity (12%, 15% in 2023; 11% of SME employers)
• legal issues (11%, 12% in 2023; 15% of SME employers)
• financial advice e.g. how and where to get finance (10%, as in 2023; 9% of SME employers)
• regulations (10%, as in 2023; 6% of SME employers)

9.3 Sources of external information and strategic advice

In the data tables accompanying this publication, table 97 shows the sources of external information or advice.

Sources of external information and strategic advice cited by businesses with no employees included:

• accountants (34%, 31% in 2023; 37% of SME employers in 2023)
• consultants / general business advisers (24%, 26% in 2023; 34% of SME employers)
• business networks / trade associations (23%, 22% in 2023; 22% of SME employers)
• internet search / google / other websites (17%, 12% in 2023; 6% of SME employers)

9.4 How information or strategic advice was delivered

In the data tables accompanying this publication, table 99 shows how external information or advice was delivered.

Of those businesses with no employees that received information or advice, 40% reported that it had been mainly delivered face-to-face (down one percentage point on 2023, but up 10 percentage points on 2022).

While face-to-face delivery has remained stable compared with 2023, there has been a decrease in businesses with no employees that had received information or advice by email (18%, down six percentage points on 2023 and one percentage point on 2022). There was little change in the propensity to have received advice over the phone in 2024 compared with the last two years (20%, down two percentage points on 2023 but the same as 2022).

Receiving information and advice through a website has increased from 10% in 2023 to 19% in 2024. 

Registered businesses were more likely than unregistered businesses to have received information and advice face-to-face (49% and 32% respectively), while unregistered businesses were more likely to receive it through a website (28% and 9% respectively).

9.5 Paying for strategic advice (England, Wales and Northern Ireland)

In the data tables accompanying this publication, table 107 shows whether or not businesses with no employees that received advice paid for it and table 108 shows how much they paid for it.

Of businesses with no employees in England, Wales and Northern Ireland that received strategic advice in the last 12 months, 54% paid for it (an increase of four percentage points on 2023 and a decrease of three percentage points on 2022). This is compared with 64% of SME employers.

Among businesses with no employees that paid for advice, 26% paid less than £500 (up five percentage points on 2023), a further 16% paid between £500 and £999 (also up five percentage points), 22% paid between £1,000 and £2,499 (down two percentage points), and 34% paid £2,500 or more (down ten percentage points).

Businesses with no employees who paid for advice paid £17,000 on average (mean). Means are affected by high values and can be misleading as a measure. This figure has been calculated only using responses with the exact amount paid for advice stated, so it excludes the respondents who gave an estimated figure within a range. The amount spent by a typical business with no employees is better reflected by using the median. The median amount paid was £1,000 (£1,800 in 2023 and £1,000 in 2022).

10. Taxation

In the data tables accompanying this publication, tables 55 and 56 show how businesses with employees keep records for taxation.

In 2024, businesses with no employees who were categorised as sole proprietors or partnerships were asked about income tax self-assessment. Overall, 82% reported that they were liable to submit returns to HMRC for income tax self-assessment. This compares with 80% of SME employers.  

Businesses with no employees liable to submit returns for income tax self-assessment were most likely to keep paper-based records (54%) and/or spreadsheets (52%) than record keeping software (32%). This compares with 65% of all SME employers that pay income tax through self-assessment using record keeping software, with 46% having used spreadsheets and 57% having used paper-based records. Compared with 2023, it has changed little for businesses with no employees (paper-based records – 65%, spreadsheets – 49% and record keeping software – 36%, in 2023)

Use of record keeping software was more common among registered than unregistered businesses with no employees (55% and 24% respectively).

11. Technology (Cohort C)

In the data tables accompanying this publication, tables 8 and 9 (Cohort C) show which businesses use technologies or web-based software to sell to customers or to manage the business, and which technologies they use.

In 2024, 53% of all businesses with no employees used technologies or web-based software to sell to customers or to manage the business (up nine percentage points on 2023). This compares with 69% of SME employers.

Registered businesses with no employees were more likely than unregistered businesses to have used these technologies (58% and 50% respectively). 

By sector, businesses with no employees most likely to have used these technologies were those in the information and communications sector (73%), while those in construction (29%) were least likely to use them.

In terms of what they used it for, similarly to SME employers, businesses with no employees were more likely to use technologies or web-based software for managing the business than for selling to customers online (42% and 25%, compared with 65% and 23% of SME employers, respectively).

Businesses with no employees in the arts and entertainment (53%), retail and wholesale (49%) and manufacturing (42%) sectors were most likely to use technologies or web-based software to sell to customers online, while those in primary (67%), information and communications (59%) and professional and scientific (53%) sectors were more likely to have used it to manage the business.

Compared with SME employers, businesses with no employees who used technologies or web-based software to sell to customers or manage the business, were less likely to use any of the technologies they were asked about, including accountancy software (49%, 80% of SME employers), electronic invoicing (41%, 62% of SME employers) and videoconferencing software (38%, 57% of SME employers).

12. Future plans

12.1 Growth ambitions

In the data tables accompanying this publication, table 133 shows whether or not businesses with no employees aimed to grow sales over the next 3 years.

In 2024, 59% of businesses with no employees aimed to grow sales over the next three years. This was nine percentage points higher than in 2023 and 2022. The equivalent figure for SME employers in 2024 was 71% (75% in 2023 and 74% in 2022).

Figure 12: percentage of businesses with no employees that aim to grow sales over the next three years

Download Figure 12 chart data

There was no difference between unregistered and registered businesses in their propensity to report an intention to grow sales.

By sector, businesses with no employees in the arts and entertainment (71%) and retail and wholesale (70%) sectors were most likely to be aiming to grow sales, while those in the transport and storage (46%) sector were least likely to be aiming to grow sales.

Figure 13: percentage of businesses with no employees that aim to grow sales of the business over the next three years, by sector and year

Download Figure 13 chart data

12.2 Plans to undertake growth-related activities (Cohort B)

In the data tables accompanying this publication, table 12 (Cohort B) shows what plans businesses with no employees have in respect of business growth over the next three years.

Over the next three years, businesses with no employees reported having the following plans:

• 25% planned to develop and launch new products or services (28% in 2023, 25% in 2022; 33% of SME employers in 2024)
• 18% planned to work towards a target to reduce carbon/greenhouse gas/other emissions (33% in 2023, 28% in 2022, when this was first asked; 39% of SME employers)
• 16% planned to introduce new working practices (23% in 2023, 22% in 2022; 40% of SME employers)
• 13% planned to recruit new staff in the UK (19% in 2023 and 2022; 47% of SME employers)
• 12% planned capital investment in the UK (18% in 2023, 19% in 2022; 29% of SME employers)
• 12% planned to increase export sales or begin selling to new overseas markets (12% in 2023, 10% in 2022; 14% of SME employers)
• 10% planned to invest in R&D (14% in 2023, 12% in 2022; 22% of SME employers)

Some 49% of businesses with no employees did not plan to undertake any of the activities listed above (19% of SME employers).

12.3 Whether plans for growth-related activities have been affected by rising costs (Cohort B)

In the data tables accompanying this publication, tables 14 and 15 (Cohort B) show whether plans have been affected by rising costs

Of businesses with no employees planning to undertake growth-related activities, 53% reported that plans had been affected by issues relating to rising costs. This was two percentage points lower than in 2023 and five percentage points higher than in 2022. This was 57% among SME employers in 2024.

When asked about the specific issues relating to rising costs that had affected plans, 55% of businesses with no employees pointed to increased energy costs (up from 44% in 2023 but down from 57% in 2022; 41% of SME employers in 2024). Issues other than increased energy costs were reported by 64% of businesses with no employees (down from 79% in 2023 and 68% in 2022; 81% of SME employers).

Of those businesses with no employees with plans affected by rising cost issues, 28% cited expectations of cost increases and 33% considered uncertainty relating to cost increases. These were higher than in 2023 (19% and 17% respectively), although lower than in 2022 (32% and 38% respectively). A similar pattern is observed among SME employers (respectively, 25% and 21% in 2024, 21% and 18% in 2023, and 31% and 37% in 2022).

13. Profiles of businesses with no employees

13.1 Number of sites

In the data tables accompanying this publication, table 6 shows the number of sites operated by businesses with no employees.

In 2024, 95% (based on those providing a response – unsure/refused removed) of businesses with no employees operated from a single site. This was similar to 2023 and 2022 (94%). This is compared with 88% of SME employers.

Unregistered businesses with no employees were more likely than registered businesses with no employees to operate from a single site (96%, compared with 93%).

Businesses with no employees in the primary (84%) and health (87%) sectors were least likely to operate from more than one site.

13.2 Business premises in residential settings

In the data tables accompanying this publication, table 20 shows whether or not businesses with no employees work away from their home.

In 2024, 70% of businesses with no employees located the main work premises in their home. This was a four percentage points increase on 2023 and 2022. It compared with 30% of SME employers in 2024.   

Registered businesses with no employees were less likely to be operating from home than unregistered businesses (61% and 76% respectively).

By sector, businesses in the information and communications (86%) and professional and scientific (83%) sectors were most likely to be operating from a residential setting. Those in the accommodation and food (46%), finance and real estate (50%), health (55%), manufacturing (57%) and retail and wholesale (58%) sectors were least likely to be home-based.

13.3 Age of business

In the data tables accompanying this publication, table 16 summarises the years that businesses with no employees have been established.

Of all businesses with no employees, 20% had been trading for less than six years (that is, they started trading between 2018 and 2024) (9% among SME employers). Some 17% started trading between six and ten years ago, 26% between 11 and 20 years ago, and 33% more than 20 years ago.

Businesses with no employees in the accommodation and food service (35%) and other services (26%) sectors were most likely to have traded for less than six years. Businesses with no employees in primary (62%) were most likely to have been trading for more than 20 years.

13.4 Legal status

In the data tables accompanying this publication, tables 14 and 15 summarise the legal status of businesses with no employees.

Businesses with no employees were most likely to be sole proprietors (60%, 46% in 2023, 58% in 2022). This compares with 6% of SME employers.

Some 27% of businesses with no employees were private limited companies limited by shares (Ltd), which was 12 percentage points lower than in 2023 and two percentage points lower than in 2022. This compares with 74% of SME employers. A further 6% of businesses with no employees were partnerships, one percentage point less than among SME employers, and 2% were private companies limited by guarantee (5% of SME employers).

Unregistered businesses were more likely to be sole proprietors than registered businesses (77% and 32% respectively). Registered businesses were more likely than unregistered businesses to be private limited companies limited by shares (Ltd) (48% and 13% respectively) or to be partnerships (13% and 3% respectively).

Businesses with no employees in the construction and information and communications sectors (both 38%) were most likely to be private limited companies limited by shares. 

Partnerships were most common within the primary (56%) and accommodation and food (22%) sectors.

13.5 Number of owners/partners/directors

In the data tables accompanying this publication, tables 21, 22, 23, 24 and 25 summarise who owns or leads businesses with no employees.

As owners and partners are not included as employees, businesses with no employees may have multiple owners and partners.

Most businesses with no employees (84%) had no directors in day-to-day control of the business who were not owners or partners (compared with 69% of SME employers).  Most of the remainder (9%) had one director (15% of SME employers).

The majority of businesses with no employees had no more than one owner, partner or director (72%, compared with 41% of SME employers); 20% had two owners, partners or directors; 6% had between three and five, and 2% had six or more.

Unregistered businesses were more likely than registered businesses to have no more than one owner, partner or director (82% compared with 56%).

By sector, businesses in the health (80%), arts and entertainment and other services (both 79%), professional and scientific and administration (both 78%) sectors were most likely to have no more than one owner, partner or director.

Overall, 83% of businesses with no employees were majority owned by the person or family who set them up (compared with 73% of SME employers). Nearly all family-owned businesses reported that the person or family who majority-owned was actively involved in managing the business (99%), compared with 98% of all SME employers).

13.6 Women-led businesses

In the data tables accompanying this publication, tables 33 and 34 summarise the extent to which businesses with no employees are led by women.

In 2024, 30% of businesses with no employees were majority-led by women (defined as controlled by a single woman or having a management team of which a majority were women). This is compared to 18% in 2023 and 20% in 2022 and 2021 and compares with 14% of SME employers. The increase in this statistic is likely due to the introduction of additional data collection methods for businesses without employees compared with previous waves of the survey.

In 2024, a consumer panel was used to identify very small-scale unregistered businesses—many found through word-of-mouth and social media—that were previously missing from traditional business lists. This expanded the sample size and diversity of unregistered businesses. Women-led businesses accounted for 37% of unregistered and 18% of registered businesses, up from 24% and 11% in 2023, when only commercial business lists were used. Comparisons with earlier years should be made cautiously.

By sector, women-led businesses were most common in the health (57%), other services (56%), administration, manufacturing (both 39%), arts and entertainment and retail and wholesale (both 38%) sectors. Women-led businesses were least common in construction (7%), finance and real estate (15%) and transport and storage (18%) sectors.

Overall, it was not possible to classify 10% of businesses with no employees as women-led or male-led, as there was insufficient information provided for these businesses (uncertainty regarding owners/partners’ gender or refusal to supply the information).

13.7 Minority ethnic group-led businesses

In the data tables accompanying this publication, table 35 summarises the extent to which businesses with no employees are led by someone from an ethnic minority group.

As reported in 2023, 6% of businesses with no employees in 2024 were MEG-led (defined as having a person from an ethnic minority in sole control of the business or having a management team with at least half of its members from an ethnic minority. This was the same proportion as reported among SME employers in 2024.

There was little difference between unregistered and registered businesses in respect of the propensity to be MEG-led (7% and 5% respectively). Thus, the changes to how data was collected in the 2024 survey did not impact the overall statistic.

MEG-led businesses were most common in finance and real estate (15%) and information and communications (12%) sectors and least common within primary and construction sectors (both 3%).

Overall, 12% of all businesses with no employees could not be classified as either MEG-led or non-MEG-led, as there was insufficient information provided for those businesses (uncertainty regarding owners/partners’ ethnicity or a refusal to provide it).

13.8 Businesses leaders with a disability

In the data tables accompanying this publication, table 29 shows the number of owners, directors or partners with a disability, table 32 shows whether the sole owner has a disability, while table 36 shows whether businesses with no employees are classified as led by people (someone) with a disability

Whether owners, directors or partners had a disability was asked for the first time in 2024. Of those with more than one owner, director or partner, 14% reported one or more having a disability (9% among SME employers). This was higher among unregistered than registered businesses with no employees (18% and 12% respectively).

By sector, businesses with no employees in health (31%) were most likely to have at least one owner, director or partner with a disability.

Where there was just one owner, 10% were reported to have a disability (4% among SME employers). Again, this was higher among unregistered than registered businesses with no employees (11% and 8% respectively).

By sector, sole owners with a disability were most common in retail and wholesale (22%).

About 6% of businesses with no employees reported being led by people with a disability (2% of SME employers). This was defined as having a person with a disability in sole control of the business or having a management team with more than half of its members with disabilities. Some 8% of unregistered businesses with no employees were led by people with a disability, compared with 4% of registered businesses with no employees.

The term ‘disability’ was not defined in the question and survey participants were not asked about the nature of the disability.

14. Accompanying tables

The following tables are available in Excel format and ODS for this publication:

• Longitudinal Small Business Survey 2024: businesses with no employees – data
• Longitudinal Small Business Survey 2024: businesses with no employees – data – Cohort A
• Longitudinal Small Business Survey 2024: businesses with no employees – data – Cohort B
• Longitudinal Small Business Survey 2024: businesses with no employees – data – Cohort C

The survey microdata will be deposited with the ONS Secure Research Service and the UK Data Service during the Autumn of 2025. This will be available to approved researchers.

15. Technical information

15.1 Aims of the survey

This report sets out some of the key findings for the 2024 Longitudinal Small Business Survey (LSBS), a large-scale telephone CATI (Computer Assisted Telephone Interviews) survey of 10,611 UK small business owners and managers, commissioned by the Department for Business and Trade.

This survey is the latest in a series of annual and biennial Small Business Surveys (SBS) dating back to 2003. The 2024 survey was conducted between October 2024 and May 2025 by BMG Research Ltd.

The 2024 survey follows surveys conducted annually since 2015.  Sample bases for each year from 2015 to 2024, are summarised in Table 1. The 2015 survey was the largest SBS yet undertaken, while the second highest sample was undertaken in 2018. The main reason for large sample sizes in both 2015 and 2018 was to enable the survey to have a longitudinal tracking element, so, in 2015, establishing, and in 2018 further boosting, a ‘panel’ of businesses that might be re-surveyed in subsequent years, enabling a detailed analysis of how combinations of factors affect business performance through time. Any panel has an element of attrition, hence the need for a large sample size in 2015 and a boost in 2018.

Table 1

Year	Sample size
2024	10,611
2023	9,681
2022	9,524
2021	9,325
2020	7,636
2019	11,002
2018	15,105
2017	6,619
2016	9,248
2015	15,502

In 2024, 4,337 top up interviews were conducted. This was in addition to 6,305 interviews with enterprises that had already completed at least one LSBS survey between 2015 and 2023. Top-ups were needed for the following reasons:

• to represent sections of the SME population that were not active in the 2023 survey fieldwork period (businesses less than one-year old)

• to represent sectors in the raw data that may be under-represented due to businesses in the panel closing, or being hard to secure an interview with (for example, in cases where businesses work away from their main offices)

All interviews were conducted with owner/proprietors, Managing Directors or other senior directors in UK-based enterprises. For the top-ups, named contact details were not supplied, and it was necessary to screen to find an appropriate respondent. The average interview length was 18.6 minutes (16.5 minutes for panellists, 21.9 minutes for top-ups).

The main aim of the survey is to collect a range of information on SMEs. The survey measures:

• recent turnover and employment growth
• capabilities (in terms of their ability to innovate, export, train staff, etc)  - experience of accessing finance
• use of business support
• expectations of growing turnover and employment
• the major obstacles that prevent SMEs fulfilling their potential
• the characteristics of SMEs such as the number of sites they occupy, the number of owners, whether they have separate business premises, whether or not they are a social enterprise (or a socially oriented SME) etc
• the characteristics of their owners and leaders

There are 3 main reports based on the 2024 LSBS:

• a cross-sectional report based on SME employers. A cross-sectional report is a snapshot of the state of SMEs at any stage in time, this one being from the latter quarter of 2024 up to and including the first quarter and first half of the second quarter of 2025
• a cross-sectional report based on businesses with no employees
• a longitudinal report based on those businesses that responded in the last 4 years of the survey. This looks at the main changes that apply to the ‘panellists’ from year to year, and what appears to influence these changes

23 of the 10,611 interviews were with large employers with 250 or more employees. The reason for interviewing these is that these businesses were SMEs when first interviewed but have grown since. They form a part of the longitudinal analysis, but not the cross-sectional.

15.2 Survey method

Of the 9,681 interviews conducted in 2023, 8,419 (91%) agreed to a follow-up interview. The objective was to obtain the highest possible number of repeat interviews with these panellists. 4,791 were interviewed between October 2024 and May 2025 (57%, higher than in 2023 - 54%, but lower than 2022 - 60% and 2021 – 62%). Of these, 883 had no employees, 17 were large businesses with 250+ employees, and the remainder (3,891) were SME employers. This group is known as the ‘full panel’.

In addition, 9,244 businesses interviewed from 2015 to 2022 but not in 2023 could be re- approached for interview (they had given permission for re-interview and had not refused to take part between 2015 and 2022 and had not ceased trading). 1,513 of these were interviewed in 2024, a response rate of 16% (18% in 2023, 16% in 2022 and 18% in 2021), of which 203 had no employees, 1,304 were SME employers, and 6 were large businesses with 250+ employees. This group is known as the ‘past panel’.

In addition to these, 4,337 ‘top-up’ interviews were conducted, of which 1,140 had no employees and 3,197 were SME employers. As a result, the total sample size in the 2024 survey was 10,611, of which 2,192 had no employees, 8,396 were SME employers and 23 were large employers (250+ employees).

The top-ups were sampled using a method consistent with the 2015 to 2023 surveys:

• the sample was stratified within each of the 4 UK nations
• targets were set according to the employment size of enterprises and, within those targets, by 1-digit sector (using SIC 2007)
• the targets over-represented businesses with 5 to 249 employees substantially in comparison to their actual numbers within the business population

For registered businesses, the Inter Departmental Business Register (IDBR) was used as the sample source. For unregistered businesses with no employees, a database from the commercial database provider MailingLists was used. These contacts were screened out if they either had employees on their payroll or paid VAT, as these would have duplicated contacts found within the IDBR.

In addition, in 2024, we used a commercial panel to identify very small-scale unregistered businesses within the general UK population. Many unregistered businesses promote themselves via word-of-mouth and social media and may be missing from traditional business lists as a result.

The IDBR is a record of all UK enterprises that pay VAT or PAYE, which contains around 2.7 million unique entries for enterprises. The DBT Business Population Estimates (BPE) publication 2024 estimated around 5.5 million enterprises in the UK in total. The difference in the figures is explained by the number of unregistered enterprises that do not pay VAT or PAYE, estimates of which derive from the Labour Force Survey (LFS). This is the reason why an alternative database was retained as the source for top-up businesses with no employees, as it contains records for both registered and unregistered businesses.

The targets within the sample stratification matrix were informed by the 2023 BPE, the latest available at the start of fieldwork. However, survey findings were weighted to the 2024 BPE which were published a few months into the fieldwork period. The 2024 BPE was used for weighting as it more accurately represents the IDBR contacts used for the survey, as well as providing a more up-to-date picture of UK small businesses than the 2023 BPE.

A 336-cell sample stratification matrix was devised, the targets within each cell informed by the 2022 BPE. These cells were defined by cross classifying the following 3 categories:

• 14 ‘one digit’ SIC 2007 categories (ABDE, C, F, G, H, I, J, KL, M, N, P, Q, R, S)
• 6 size categories (unregistered zero employees, registered zero employee, 1 to 4 employees, 5 to 9 employees, 10 to 49 employees, 50 to 249 employees)
• 4 nations (England, Scotland, Wales, Northern Ireland)

Once the sample was drawn, with sample sizes informed by differential likely tele-matching success rates for each cell (based upon experience from the previous surveys), no quotas were employed on size, sector or any other criteria except for country, where minimum sample sizes were sought within Northern Ireland, Scotland and Wales.

A review of the 2023 questionnaire was undertaken through consultations with stakeholders. This resulted in a number of alterations to existing questions from previous surveys, new question additions and deletions. The changes were informed by the requirement to balance stakeholders’ latest needs with the desire to exploit the longitudinal power of the survey. The consultation was followed up by a ‘live’ pilot of 100 interviews of the adjusted year ten questionnaire.

Based on the whole sample, the response rate for full panellists was 57%, three percentage points higher than in 2023. For past panellists the response rate was 16%, two percentage points lower than in 2023, but the same as in 2022. For IDBR top-ups the response rate was 4%, as in 2023. For unregistered top-ups, the response rate was 2%, three percentage points lower than in 2023. There is more detail in the technical report, which includes tele-matching rates and other forms of non-response.

15.3 Note on this report

Please note that the findings presented in this report relate to businesses with no employees only – SMEs with employees and large employers have been excluded from the dataset on which this report is based. This procedure is consistent with reporting of previous surveys. The overall sample size for non-employers across the UK in 2024 was 2,192.

15.4 Sample Cohorts

One of the main reasons given by respondents who do not want to participate in LSBS is that the interview length is too long. In 2018, BEIS made a commitment to bring down the average interview length and introduced ‘Cohort questions’, which we used again in 2024.

Three Cohorts (A, B and C) were created. Each Cohort was exclusively asked a series of non- key questions. For example, only Cohort A was asked questions on business energy usage. Cohorts were chosen for respondents at random during their interview.

There were approximately 3,500 respondents in each 2024 Cohort: 3,575 in Cohort A, 3,533 in Cohort B and 3,504 in Cohort C. Each respondent is part of one Cohort only. Where a business is in each of the datasets from 2018 to 2024, its Cohort for 2024 is entirely independent of its Cohorts between 2018 and 2023 (for example, knowing a business was in Cohort A in 2018 tells you nothing about which Cohort it is in in 2024). Because of the different respondents answering questions for different Cohorts, we have calculated separate Cohort weights for analysing responses to the Cohort questions. To analyse questions asked of Cohort A in 2018, analysts should use the 2018 Cohort A weights, for questions to Cohort C in 2019 they should use the 2019 Cohort C weights, and so on.

15.5 Sector definitions

Throughout this report, data tables show sectoral analysis by one-digit SIC 2007 codes. Because of relatively small numbers in the business population and survey sample, 2 of these sectors are grouped together: ABDE, labelled as primary, comprises (A) agriculture, fishing and forestry, (B) mining and quarrying, (D) electricity and gas, and (E) water, sewerage and waste management; KL, labelled as ‘financial and real estate’, comprises (K) finance and insurance, and (L) real estate.

To gain a better picture of the types of businesses that fall into each sector category, the following number of businesses with no employee in each sector and the percentage of them that are unregistered businesses:

• ABDE (primary) - there were 118,500 non-employing businesses in this sector in 2024, of whom 19% were unregistered businesses
• C (manufacturing) - there were 160,000 non-employing businesses in this sector in 2024, of whom 71% were unregistered businesses
• F (construction) - there were 676,300 non-employing businesses in this sector in 2024, of whom 73% were unregistered businesses
• G (retail and wholesale) - there were 314,300 non-employing businesses in this sector in 2024, of whom 51% were unregistered businesses
• H (transport and storage) - there were 265,700 non-employing businesses in this sector in 2024, of whom 74% were unregistered businesses
• I (accommodation and food service) - there were 68,500 non-employing businesses in this sector in 2024, of whom 63% were unregistered businesses
• J (information and communications) - there were 261,700 non-employing businesses in this sector in 2024, of whom 58% were unregistered businesses
• KL (financial and real estate) - there were 153,100 non-employing businesses in this sector in 2024, of whom 46% were unregistered businesses
• M (professional and scientific) there were 566,500 non-employing businesses in this sector in 2024, of whom 60% were unregistered businesses
• N (administrative services) - there were 367,000 non-employing businesses in this sector in 2024, of whom 74% were unregistered businesses
• P (education) - there were 276,600 non-employing businesses in this sector in 2024, of whom 94% were unregistered businesses
• Q (human health and social work) - there were 292,800 non-employing businesses in this sector in 2024, of whom 90% were unregistered businesses
• R (arts and entertainment) - there were 251,700 non-employing businesses in this sector in 2024, of whom 86% were unregistered businesses
• S (other services) - there were 299,000 non-employing businesses in this sector in 2024, of whom 91% were unregistered businesses

More detail on the sectors is available in the DBT Business Population Estimates.

15.6 Uncertainty

Since the LSBS questioned a sample of UK SMEs, rather than all of them, there is inevitably a level of uncertainty around the estimates we derive from the survey and how close they will be to the true values.

15.7 Coverage and representativeness

In order to ensure the sample used in this survey is adequately representative of the UK SME population, we have used 2 sampling frames to draw our sample from. One is the IDBR from the Office for National Statistics, which has excellent coverage of registered businesses in the UK, as it is regularly updated with information from HMRC. In 2024 we used the MailingLists service and for the 2024 survey a commercial panel to include businesses not registered for VAT or PAYE.

The coverage of the unregistered business population is less well understood. It is likely that the MailingLists frame is good for well-established businesses that advertise their presence in trade directories for example. You can imagine a small business owner that relies on word of mouth and a few repeat customers and has no wish to expand the business for the moment (for example, there are people who make birthday cakes and other cakes in their own kitchens at home, who might have at most a Facebook page or Instagram account to advertise themselves). Neither of our sampling frames is likely to list this kind of small business.

Our sample is deliberatively unrepresentative in the sense that it overrepresents larger SMEs and overrepresents non-English businesses. This is to ensure that we have reasonable sample sizes for medium-sized businesses, Scottish businesses etc., otherwise we would not be able to obtain robust estimates for important subgroups. A truly proportionate sample would otherwise contain just a handful of medium-sized businesses. We produce survey weights so that analysts can nevertheless arrive at estimates that take due account of the actual distributions in the population – micro businesses have larger weights than medium-sized businesses for example.

Another way that our sample might be unrepresentative is that the businesses that take part in the survey (which is after all voluntary) are different from the businesses that we sample but do not agree to take part, with respect to the various questions we ask. This is known as non- response bias. For example, if struggling businesses are more likely to refuse to take part than thriving ones, then our final achieved sample will underrepresent struggling businesses, and estimates of things like future ambition, that might differ considerably between struggling and thriving businesses, might be biased.

It is hard to quantify non-response bias. We have taken a number of standard steps to try to minimise its risk. The research company that conducted our interviews made multiple attempts for each sampled business for which we could obtain a telephone number, so that we can get more of the reluctant businesses, and we did not have hard quotas for each of our ‘target cells’ (quotas for a target cell, for example 25 interviews of micro businesses in finance and real estate in Wales, can encourage an interviewer to give up quickly on reluctant businesses and focus on snapping up as many easier businesses as possible in order to meet their quota as quickly as possible). Sampled businesses were also given contact details for government officials so they could confirm the survey was genuine and official.

15.8 Sampling uncertainty

It is possible to quantify the amount of uncertainty that arises from using a sample instead of interviewing the entire population. There are a number of ways of doing this, but we will focus on using a statistical tool known as confidence intervals.

In order to run our survey, we drew a random sample. This means that on another day we would have drawn a different sample. With our actual sample, we estimated that 73.1% of businesses with no employees in 2024 made a profit or generated a surplus in the previous financial year. But it is possible that another random sample might have found that number to be 67%, or 71%, even though the actual true figure is unchanging. This is known as sampling variability.

What we can do is produce a 95% confidence interval around an estimate. The interval has been calculated using a method that, for 95% of the possible random samples we could have drawn, will produce an interval that contains the true value of this profitability measure. Each different random sample would have a different confidence interval, but 95% of the time the interval produced will contain the true value. So, our actual survey estimate is 73.1%, and we are 95% confident that the true value is in the range 67% to 71%.

Our survey contains hundreds of measures, and it is not practical to produce confidence intervals for each one of them. Instead, Table 2 summarises the sampling uncertainty for the key measures reported in this publication.

Most of the estimates from this survey are presented as proportions or percentages (such as 10%). If this was an estimate relating to all UK businesses with no employees, then we look at the ‘all UK’ row and the column for estimates at 10%. The confidence interval is given as +/- 1.43%. So, our confidence interval around the 10% estimate is 10% +/-1.3%, that is, from 8.7% to 11.3%. We are 95% confident that the true figure is between those values.

If the estimate had been closer to 30% or to 70%, then our interval would have used +/-1.9% instead of +/- 1.3%, according to Table 2. When estimates are close to 50%, that is the ‘worst case scenario’ in the sense that the confidence intervals are at their widest. They narrow more as the estimate moves away from 50% (in either direction). Thus, the intervals are slightly narrower for 30% or 70% estimates, and narrower still for 10% and 90% estimates.

Confidence intervals get narrower when you have larger sample sizes too. If our 10% estimate is for registered business with no employees rather than for all UK businesses with no employees, we use a different row of the table and find the confidence interval to be +/- 1.7%. If we have an estimate of 65% for the construction sector, that is pretty close to 70% so we use that column of the table and arrive at an approximate confidence interval of +/- 2.6%.

Table 2 is useful for estimates of proportions but cannot be used for other measures. For example, we have estimated a mean of external finance sought for by non-employers - £118,951.

Table 2 cannot be used to produce a confidence interval for this estimate, though it can be done in the data analysis software, and in this case, is calculated at +/- £48,343. The underlying data tables published alongside this report contain something called ‘standard errors’ for estimates that are not proportions, such as amount of finance sought, or number of employees. Standard errors are another way of quantifying the sampling variability. As a rule of thumb, twice the standard error gives you the ‘+/-’ for a 95% confidence interval.

Table 2: sampling uncertainty

	Sample size	Confidence interval for an estimate of 10% or 90%+/- (%)	Confidence interval for an estimate of 30% or 70%+/- (%)	Confidence interval for an estimate of 50%+/- (%)
All UK	2,192	1.3	1.9	2.1
England	1,720	1.4	2.2	2.4
Scotland	183	4.3	6.6	7.2
Wales	170	4.5	6.9	7.5
Northern Ireland	119	5.4	8.2	9.0
Unregistered businesses without employees	955	1.9	2.9	3.2
Registered businesses without employees	1,237	1.7	2.6	2.8
ABDE. Primary sector	123	5.3	8.1	8.8
C. Manufacturing	130	5.2	7.9	8.6
F. Construction	231	3.9	5.9	6.4
G. Retail and wholesale	277	3.5	5.4	5.9
H. Transport and Storage	80	6.6	10.0	11.0
I. Accommodation and Food	67	7.2	11.0	12.0
J. Information and communication	136	5.0	7.7	8.4
KL. Finance and real estate	91	6.2	9.4	10.3
M. Professional and scientific	379	3.0	4.6	5.0
N. Administration and support	167	4.6	7.0	7.6
P. Education	138	5.0	7.6	8.3
Q. Human health	99	5.9	9.0	9.8
R. Arts and entertainment	126	5.2	8.0	8.7
S. Other services	148	4.8	7.4	8.1

For Cohort questions, the margins of error increase by about 70% - for example +/- 2.0% becomes +/- 3.4% (to increase a number by 70%, multiply it by 1.7). This table applies to estimates of proportions.

15.9 Which differences are statistically significant?

Generally, throughout this report where we talk about differences (between the estimate for a subgroup and the total, say, or between 2 subgroups) we mean they are different even after taking account of the sampling variability. This is often described as statistically significant. Where we simply list numbers that are different (for example ‘England (41%), Scotland (38%), Wales and Northern Ireland (both 36%)’) this does not necessarily mean that they are statistically significantly different from each other. Where we draw attention to some estimate being ‘higher’, or a subgroup being ‘most likely’, or single out a sector as higher than the rest, this is a statistically significant difference.

For example, we have stated the following: businesses with no employees that were more likely to export operated in; retail and wholesale (34%, 25% in 2023), information and communications (32%, 22% in 2023), manufacturing (30%, 20% in 2023) and arts and entertainment (30%, 20% in 2023), while those least likely to export were in accommodation and food services (1%, 2% in 2023), construction (6%, 2% in 2023), primary (6%, 2% in 2023) and other services (4%, 5% in 2023) sectors.

This does not mean that retail and wholesale businesses were statistically significantly more likely to have exported than information and communications businesses, but both these sectors were statistically significantly more likely than other businesses with no employees i.e., they were more likely to than average. Similarly, we are 95% confident that the four sectors mentioned were less likely than average to have done so, even though there is some uncertainty over those specific figures.

16. Definitions

Term	Description
Business, enterprise, firm	In this report these terms all mean the same – they are interchangeable.
Cohort	We use this term to describe the way the survey samples from 2018 onwards are divided into 3 separate groups (the Cohorts) and answer some questions that are for their Cohort only. This was done to increase the number of questions asked in the survey without increasing the average length of interview.
Disability-led business	A business where at least half of the leadership team is reported as having a disability (the term, ‘disability’ was not defined for respondents, nor were respondents asked about the nature of the disability).
EFTA	European Free Trade Association. This comprises the countries of Iceland, Liechtenstein, Norway and Switzerland. The 3 countries apart from Switzerland are part of the European Single Market as members of the European Economic Area.
EU	The EU is the European Union. This comprises the countries of Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czechiac, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden
Exports	In this report this means a British business selling goods or services to a customer outside the UK. An English business selling to a Northern Irish business is not exporting, but a Northern Irish business selling to a customer in the Republic of Ireland is exporting.
Family-owned business	This means a business where a majority of the owners are in the same family. A business with a single owner is automatically a family-owned business, although a business with no owners is not. ‘Majority’ means more than half, but ultimately, we require the respondent to the survey to interpret this: where a business has more than one working owner or partner, they are simply asked if the business is family-owned and this is defined in the questionnaire as ‘majority-owned by members of the same family’.
Finance	In this report when we talk about businesses accessing finance or applying for finance, we usually mean borrowing money for business reasons. This might be from banks or other financial institutions or might be less formal arrangements such as money borrowed from friends and family.
Health sector	The health sector in this report is more accurately described as the ‘human health and social work sector’. It does not include veterinary services (which fall under the professional and scientific sector). As this survey covers the private sector, the National Health Service (NHS) does not come under the health sector for this survey; but private sector healthcare providers do.
Imports	In this report this means a British business buying goods or services from a business outside the UK. A Northern Irish business buying from a Welsh business is not importing, but a Northern Irish business buying from a business in the Republic of Ireland is importing.
Innovation	This refers to a business implementing a new or significantly improved product or process (which can also include new marketing methods or organisational methods). The international manual on collecting data about innovation is known as the Oslo Manual.
Longitudinal	A longitudinal study is one which collects data from the same unit at different times. We call this survey longitudinal because each year we try to re-interview businesses that took part in the survey in previous years. Analysts have specific methods for analysing longitudinal data. This report focuses on cross-sectional analysis – even when we refer to results from earlier years of the survey, we take no particular account of the fact that some businesses will have contributed to both years of the survey (in other words, the analysis is not longitudinal). We have longitudinal analysis in the panel report which we publish separately, and the dataset is available to approved researchers to perform their own longitudinal analysis if they wish.
Mean	A measure of the average which takes the total of whatever is being measured and divides it by the number of units being measured. (For example, mean turnover of micro-businesses in 2024 is the total turnover of micro-businesses in 2024 divided by the total number of micro-businesses in 2024.) As the LSBS is a sample survey, the mean is estimated, as we can only estimate the relevant total for example. The mean is a common and well-known statistical measure, but it can be affected by extreme values which make it poor as a measure of the ‘typical’ value of whatever is being measured. This is often a problem with business statistics as there are often many ‘extreme’ values.
Median	The median is an alternative measure of the average which is not affected by extreme values in the way that the mean can be. As such it is often a better way of finding a ‘typical value’ of whatever is being measured. The median is the middle value of what is being measured if all the measured values are put into order from smallest to largest value. As with the mean, in the LSBS we can only estimate the median as we are working from a sample.
Medium-sized business	A business which has between 50 and 249 employees (whether they are full-time or part-time). These are the largest SMEs, since businesses with 250 or more employees are defined as large businesses in this survey. Alternative definitions of business size are sometimes used by other studies (which might include consideration of annual turnover or total assets belonging to a business).
MEG-led business	A business where at least half of the leadership team comes from minority ethnic groups (as this is a UK survey, minority ethnic groups are those that are not of any White background, including White British, etc). The leadership team comprises the directors and working owners. We can include members of several ethnic groups and can include people who describe themselves as mixed ethnicity where White British background is one of those ethnicities.
Micro business	A business which has between one and 9 employees (whether they are full-time or part-time).
National Minimum Wage, National Living Wage	The National Minimum Wage has been in operation in the UK since 1999. This sets a minimum value for the hourly rate of pay that employers must pay, though this level depends on the age of the employee and differs for apprentices. It does not depend on the size of the employing business. It is usually updated once a year following a (non-binding) recommendation by the Low Pay Commission but ultimately determined by the UK government. The National Living Wage is a minimum wage that applies to workers from the age of 25 and has been in place since 2016.  It was extended to 23- and 24-year olds on 1 April 2021. As it is higher than the National Minimum Wage it effectively supersedes it for employees aged 25 or more.
PAYE	This stands for ‘pay as you earn’ and describes the system where employees’ taxes on income are deducted automatically from their pay before they are paid. If this is done accurately then the employee does not face an annual tax bill for these taxes. The relevance for this survey is that businesses that we describe as ‘unregistered’ will not be registered for PAYE with the UK tax authorities – so if a business is registered for PAYE we know that it ought to be included in our sampling frame for registered businesses, the IDBR.
Private sector, public sector	The survey is one of private sector businesses, which are businesses where the government ‘does not exercise significant control over the general corporate policy’ of the business. The Office for National Statistics follows international guidance to determine whether something is in the public sector, and have more information on their process here. Note that the private/public sector distinction is not the same as the market/non- market distinction and in particular note that charities and social enterprises can be in the private sector (in fact the majority of these are). The ONS page has more detail on this.
R&D	This stands for ‘research and development’ and in this survey is usually referred to in the context of ‘R&D spending’, meaning spending on creative and systematic work to increase the stock of knowledge or to devise new applications of existing knowledge. The international manual on collecting data about R&D is known as the Frascati Manual.
Red tape	This is an informal term used to refer to regulations or requirements that are imposed on a business or person. In this survey it is sometimes cited by businesses as an obstacle. Different businesses may have different ideas as to what counts as red tape, and the ultimate source of regulations that are perceived as red tape could be governmental or non- governmental.
Registered business	In our survey we use ‘registered’ businesses to mean those that are registered for PAYE (and so are employers) or registered for VAT (and so have an annual turnover above a certain threshold set by the UK government). In either of these cases such businesses ought to be included in our sampling frame for registered businesses, the IDBR. Some unregistered businesses do appear in the IDBR, but we use a separate sampling frame for unregistered businesses which has better coverage of them.
Sector	In this report businesses are classified into one of a number of non- overlapping sectors. We use the Standard Industrial Classification but have combined some of the categories to make them more practical for our survey. See the ‘sector definitions’ section of this report for more detail.
SIC 2007	This is the specific version of the Standard Industrial Classification that is used for this survey, in common with most official statistics in the UK. Find more detail on SIC 2007 on the ONS website.
Small business	A business which has between 10 and 49 employees (whether they are full-time or part-time). In some contexts, people use the term ‘small business’ to refer to all businesses that are smaller than large and medium- sized businesses (in other words all businesses with fewer than 50 employees) but in the LSBS we always use the narrower definition when referring to small businesses specifically.
SME	This stands for ‘small and medium enterprises’, but this is commonly meant to refer to all businesses, firms and enterprises that have fewer than 250 employees, including those that have no employees at all. This means that in the LSBS ‘SMEs’ actually comprise business with no employees, micro businesses, small businesses and medium-sized businesses.
Surplus	Our survey includes not-for-profit enterprises and for many of these it is more appropriate to use the term ‘surplus’ to refer to an excess of revenue (money coming in, from all sources) over expenditure (money going out, for all reasons).
Trade credit	Trade credit is typically used to refer to when a business receives goods or services from another business but does not pay for it in full at the time of delivery. We ask about it in the survey in the section on finance, but we do not treat it as a form of external financing – rather, it is contrasted with late payments, so it is better thought of as a form of agreed delayed payment, with late payments a delayed payment that has not been agreed.
Turnover	In the LSBS this term is usually synonymous with ‘sales’. Although for the purposes of preparing accounts ‘turnover’ may be defined differently from ‘revenue’ or ‘sales’ we do not specify a particular definition in our questionnaire and assume that respondents interpret it to mean revenue from sales which do not take account of costs.
VAT	Value-added tax is tax which businesses are liable to pay if their annual turnover is above a certain threshold. Businesses which are registered for VAT with the UK tax authorities are considered to be ‘registered’ businesses for this survey and ought to be included in our sampling frame for registered businesses, the IDBR.
Women-led business	Women-led businesses are defined as those majority-led by women, that is controlled by a single woman or having a management team of which a majority are women. ‘Majority’ here means more than 50%.

17. Further Information

17.1 Future updates to these statistics

The Department for Business and Trade (DBT) intends to continue the survey for at least one further wave. The delay to field start date that occurred in 2020 due to the coronavirus (COVID-19) pandemic has impacted on fieldwork dates since then. Fieldwork has begun in October and run up until the end of April each year, but there was an extension to the fieldwork period up to 16th May 2025 for the 2024 survey, to meet a higher sample requirement than previously.   Interviewing for the 2024 survey took place between the 18th of October 2024 and the 16th of May 2025. We anticipate that the field dates for the 2025 survey will be similar to those of 2024.

17.2 Related statistics

The publication of statistics relating to businesses with no employees derived from the same survey is on the same day as this publication. Also, we will publish a panel report on the same day which focuses on businesses that have taken part in several waves of this survey and associated longitudinal analysis. The associated technical report which will include the questionnaire used for the 2024 survey, will be published in Autumn 2025.

The Scottish Government usually produces its own publication based on the same data but focused on Scottish businesses Small Business Survey Scotland: 2023 to 2024

DBT publishes the Innovation Survey which covers the topic of innovation in much greater detail and covers large businesses (which the LSBS excludes) but not micro businesses and non-employers (which the LSBS includes). Also, the National Survey of Registered Businesses (NSRB) which covers business sentiment around exporting and trade. The survey focuses on businesses with a turnover over £500,000 or more due to their higher potential to export.

As outlined elsewhere in this report DBT publishes the Business Population Estimates (BPE) which details the structure of the UK’s business population (and which the LSBS uses for determining sample sizes and for weighting). The BPE contains information about employment and turnover in different sectors and includes information at regional level as well as nationally.

The Office for National Statistics conducts many surveys of businesses, many of which cover topics that the LSBS examines too. A good starting place is the Annual Business Survey, which does not cover all the sectors of the economy but has very good coverage of large businesses.

The Department for Culture, Media and Sport (DCMS) publish Social Enterprise  Market Trends, which takes a deeper look at the social enterprises that are identified in the LSBS. BEIS and DCMS worked to improve the survey questions used to identify social enterprises, with the new questions being used in the 2017, 2019, 2021 and 2023 surveys.

The Department for Education (DfE) conducts the Employer Skills Survey. The 2024 Employer Skills Survey was published in July 2025 Employer Skills Survey , Calendar year 2024 - Explore education statistics - GOV.UK

17.3 Uses of these statistics

As a wide-ranging survey of SMEs, the LSBS is of interest to many government departments and agencies. Department for Energy Security and Net Zero makes use of the questions on energy use by SMEs to develop policies on business energy such as non-domestic smart meters. Statistics are used by the government Equalities Office to monitor rates of women-led businesses in the SME population. The figures for MEG-led SMEs are published by the government’s Race Disparity Unit as part of its  Ethnicity Facts and Figures service. DBT utilises LSBS data to analyse the export and import behaviours of UK SMEs, as well as the operation of the UK internal market. These insights also helped to inform the Small Business Strategy, as outlined in Backing your business: our plan for small and medium-sized businesses - GOV.UK

As mentioned above DCMS makes use of the social enterprises data and the Scottish Government uses the data for evidence and analysis on a broad range of policy areas. 

In the past the Department for the Environment, Food and Rural Affairs (Defra) has analysed rural SMEs, and the Low Pay Commission has looked at what businesses say about the National Minimum Wage and National Living Wage. HM Revenue and Customs has sponsored questions looking at SME preparedness for the Making Tax Digital Programme. Innovate NI looks at Northern Irish companies and their innovation activities. The British Business Bank makes use of the data on access to finance.

The LSBS is increasingly widely used in the academic and research community, in the UK and abroad. We will run a mini competition later in 2025 for research teams to apply for small grants to conduct research using the latest LSBS data. Previous research papers are available here Longitudinal Small Business Survey Research Showcase event - Enterprise Research Centre.

The data will continue to be made available by the ONS Secure Research Service and the UK Data Service for approved researchers. The Institute for Family Business makes use of the survey in its ‘State of the Nation’ reports, and the Federation for Small Businesses has used the LSBS in its research work, for example the Unlocking Opportunity report.

17.4 User engagement

Users are encouraged to provide comments and feedback on how these statistics are used and how well they meet user needs. Comments on any issues relating to this statistical release are welcomed and should be sent to business.statistics@businessandtrade.gov.uk.

The department statement on statistical public engagement and data standards  sets out the department’s commitments on public engagement and data standards as outlined by the Code  of Practice for Statistics.

17.5 Statistics error and revision policy

The statistics error and revision policy sets out the revisions policy for these statistics, which has been developed in accordance with the UK Statistics Authority Code of Practice for Statistics.

17.6 Pre-release access to statistics

Principle T3 of the Code of Practice for Statistics requires that access to official statistics before their public release is limited to certain individuals. This includes those involved in the production of the statistics and the preparation of the release, and those involved for quality assurance and operational purposes. Pre-release access may only be granted in accordance with the rules and principles set out in the Pre-release Access to Official Statistics Order 2008. In addition, the order requires that records are published of those who have access prior to public release.

Below is the list of roles for people who received pre-release access to Longitudinal Small Business Survey 2024:

• Secretary of State, Department for Business and Trade (DBT)
• DBT Parliamentary Under Secretary of State
• DBT Special Advisers
• DBT Permanent Secretary
• DBT Deputy Director, Chief Statistician
• DBT Press Officers x1
• DBT SME Analyst x2
• Scottish Government Analyst x2

18. Contact

Responsible statistician: Jayshree Varsani.

Email: business.statistics@businessandtrade.gov.uk

Media enquiries: 020 7215 2000

Public enquiries: 07741 703241