Official Statistics

Longitudinal Small Business Survey 2025: businesses with no employees

Published 15 October 2026

1. Headline findings

This edition of the Longitudinal Small Business Survey (LSBS) is the 11th wave that has been completed since 2015. The report covers a broad range of topics that provide insights on small and medium-sized enterprise (SME) performance and the factors that affect this. This report presents results for businesses with no employees.

In 2025, businesses with no employees remained more likely than they were prior to 2024 to expect to take someone on and there were higher levels of sales turnover growth than in 2024. There is an upward trend in expectations of growth for both employment and turnover going forward among these businesses.

Exporting and plans to export were holding steady, with exporting to countries in the European Union still very significant for businesses with no employees.

In 2025, there was a continuation of the upward trend in the tendency for businesses with no employees to seek finance. There was less reliance on bank overdraft facilities – a reversal of the position in 2024 – and a greater use of loans from financial institutions.

In 2025, while competition remained the most frequently mentioned obstacle to business success among businesses with no employees, taxation overtook the level of energy prices as the next most frequently mentioned.

Innovation and use of technology, including the use of record keeping software for taxation, had all increased on levels reported in 2024 among businesses with no employees. However, in terms of the use of technology, businesses with no employees still lag behind SME employers.

There was an increase in businesses with no employees seeking business support in 2025, particularly with regard to business growth, financial advice and use of e-commerce and technology, suggesting that these were areas in which businesses with no employees required most support.

2. Summary of highlights from sections

2.1 Business performance

In 2025, 10% of businesses with no employees had previously employed at least one person at the same time last year. This was a lower proportion than reported in 2024 (14%). Fewer had expectations of employment growth for the next 12 months than in 2024 (16%, compared with 18%), although this remained at higher levels than prior to 2024 (12% in 2023).

There was a significant increase in businesses with no employees reporting growth in annual sales (turnover) over the preceding 12 months in 2025, compared with 2024 (34%, compared with 27%), back up to levels reported in 2023 (32%). Businesses with no employees reporting a fall in turnover during this period was at its lowest level since 2019 (25% – 23% in 2019). 

There was also a positive trend for the outlook for turnover growth over the next 12 months, with a higher proportion of businesses with no employees expecting an increase in turnover over this period than over the previous 2 years (34%, compared with 32% in 2024 and 28% in 2023).

While turnover growth can be the result of higher levels of inflation and upward pressure on prices, in 2025 businesses with no employees were also signficantly more likely than in 2024 to report generating a profit or surplus in the last financial year (77%, compared with 69% in 2024).

In 2025, 58% of businesses with no employees aimed to grow sales over the next 3 years, which represents little change on 2024 (59% in 2024), but remained at a higher level than in 2023 (50%).

2.2 Exporting

The upward trend in exporting reported in 2024 continued in 2025, with a 1 percentage point increase in the proportion of businesses with no employees who had exported goods or services in the last 12 months (17%, compared with 16% in 2024 and 12% in 2023).

There was an increase in exporting to European Union (EU) countries in 2025 compared with 2024 (66% and 59%, respectively), which was reflected in an increase in businesses with no employees that export in Northern Ireland between 2024 and 2025 (an increase in sales across the border with Republic of Ireland).

In 2025, there was an increase in the proportion of businesses with no employees that planned to increase their level of exports over the next few years (52%, compared with 36% in 2024), although this was a reversal of the decrease reported in 2024 against 2023 (49% in 2023).

Of those who had not exported but had a product or service suitable for exporting, 37% had plans to export, compared with 34% in 2024.

In 2025, businesses with no employees were less likely than SME employers to import (18%, compared with 24% of SME employers), but there was an increase in the tendency for businesses with no employees to have done so (13% in 2024, 14% in 2023).

2.3 Access to external finance

In 2025, 53% of businesses with no employees were using some form of finance (49% in 2024, 58% in 2023). This is compared with 70% of SME employers.

There was an increase in the proportion of businesses with no employees that had sought external finance in 2025 – 16%, compared with 12% in 2024 and 8% in 2023, maintaining an upward trend in this area. Among these businesses, there was an increase in applications for loans from banks, building societies or other financial institutions (34%, 32% in 2024), while fewer than in 2024 applied for a bank overdraft facility (26%, 45% in 2024).

There was also an increase in the likelihood of approaching external financial providers in the next 3 years among businesses with no employees in 2025 (22%, 18% in 2024).

Businesses with no employees were more likely to report giving customers trade credit in 2025 than in 2024, but this was still lower than in 2023 (31%, compared with 27% in 2024 and 37% in 2023). They were 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 (53%, compared with 63%), but among businesses with no employees, this had increased by 2 percentage points on 2024.

2.4 Innovation activity

In 2025, 30% of businesses with no employees had introduced new or significantly improved goods or services in the last 3 years. This was a 4 percentage point increase on 2024 and 2023. The tendency for innovating businesses with no employees to have introduced goods or services that were new to the market in the last 3 years continued to increase year on year (38%, compared with 33% in 2024 and 30% in 2023).

There was also an increase in businesses with no employees introducing new or significantly improved processes in the last 3 years, from 15% in 2023, to 14% in 2024 to 18% in 2025.

2.5 Major obstacles to the success of the business

In 2025, competition in the market continued to be the most frequently mentioned obstacle to business success among businesses with no employees (40% in 2025, 35% in 2024), although taxation edged in front of the level of energy prices as the second most frequently mentioned (37% and 36%, respectively). Compared with 2024, there was an increase in businesses with no employees citing taxation (29% in 2024), the level of energy prices (32% in 2024) and regulations/red tape (30% in 2025, 25% in 2024).

2.6 Business support

In 2025, 22% of businesses with no employees reported seeking external information or advice in the previous 12 months, which was a higher proportion than in 2024 (17%). They are, however, still less likely to have sought business information and advice than SME employers (22%, compared with 28%).

Compared with previously, businesses with no employees who sought external information or advice were more likely to seek it for help with business growth (38%, 34% in 2024, 21% in 2023), financial advice of accounting and general running of the business (32%, 21% in 2024, 23% in 2023), e-commerce and technology (21%, 14% in 2024 and 6% in 2023), financial advice e.g. how and where to get finance (16%, 10% in 2024 and 2023) and regulations (15%, 10% in 2024 and 2023). Accountants remain the most common source of external information and advice (34%, 31% in 2024).

2.7 Taxation

Of all businesses with no employees who were categorised as sole proprietors or partnerships, 85% reported that they were liable to submit returns to HM Revenue and Customs (HMRC) for income tax self-assessment (82% in 2024). They were most likely to keep paper-based records (55%), followed by record keeping software, for which there was a significant increase compared with 2024 (48%, 32% in 2024).

2.8 Technology

In 2025, 55% of businesses with no employees used technologies or web-based software to sell to customers or to manage the business, which was a slight increase on 2024 (53%). They were less likely to have done so than SME employers (74% in 2025).

2.9 Future plans

Businesses with no employees were less likely to plan to undertake growth-related activities than SME employers (47% had no plans, compared with 21% of SME employers).

They were most likely to be planning to develop and launch new products or services (25%), to introduce new working practices (21%), to undertake capital investment (17%) and/or to recruit new staff (17%). Compared with 2024, more businesses with no employees had plans to invest and/or recruit (12% planned capital investment and 13% planned to recruit in 2024), however, fewer had plans to work towards a target to reduce carbon/greenhouse gas/other emissions (14%, 18% in 2024).

2.10 Women-led businesses

In 2025, 24% of businesses with no employees were majority-led by women. This has fluctuated over the last couple of years – 30% in 2024, 18% in 2023. It compared with 19% of SME employers in 2025.

Unregistered businesses with no employees were more likely to be women-led than registered businesses (30% and 14%, respectively).

2.11 Minority Ethnic Group-led businesses

In 2025, 9% of businesses with no employees were led by someone from an ethnic minority group. This compared with 6% in 2024 and 2023. It compared with 6% of SME employers in 2025.

2.12 Disability-led businesses

In 2025, 7% of businesses with no employees were led by someone with a disability, which compared with 6% in 2024, and 5% of SME employers in 2025.

2.13 Veteran-led businesses

Some 3% of businesses with no employees were led by someone with who had previously served in the armed forces. This was asked for the first time in 2025. It is compared with 3% 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 2025 survey (year 11). It focuses on those businesses with no employees (non-employers), with a separate report on SME employers.

Separate reports are published because we use 3 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 (IDBR) from the Office for National Statistics (ONS), which has complete coverage of the population from VAT and PAYE records, whereas for the sample of businesses with no employees we use the IDBR, and both a commercial data provider and 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 2 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 to 9 employees; small businesses which have 10 to 49 employees; and medium-sized businesses which have 50 to 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 – 245 businesses have taken part in all 11 years of the survey so far and another 5,832 businesses in 2025 had taken part in at least one previous survey (‘panellists’). In addition, there were 4,629 businesses new to the survey (‘top-ups’). The overall LSBS sample in 2025 was 10,481, including 8,042 SME employers, of which 20 were large employers (250 or more employees) and are not included in the sample of 8,022 SME employers that are reported on, and 2,439 businesses with no employees, on which this report is based on.

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 1 of 3 cohorts – A, B or C, and some questions were only asked of one cohort (though most questions went to all 3 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 43 shows how many employees businesses had on their payrolls across all UK sites 12 months before their interview and table 44 shows how the size of the workforce has changed over the last 12 months.

An estimated 10% of businesses with no employees employed at least one person 12 months previously, which is 4 percentage points lower than 2024 and 1 percentage point up on 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

Download Figure 1 chart data

Unregistered businesses were less likely to have had at least one employee a year ago than those that were registered (7% compared with 15%).

By sector, businesses in information/communication (18%) and construction (15%) were most likely to have reduced their employment levels, while those in other services (4%) were least likely to have done so.

4.2 Expectations for employment growth

In the data tables accompanying this publication, table 46 shows whether the business expects to have employees in 12 months’ time.

Some 16% of businesses with no employees expected to increase employment in a year’s time (2 percentage points lower than in 2024 and 4 percentage points higher than in 2023), while 82% 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

Download Figure 2 chart data

There was little difference between unregistered and registered businesses without employees in this respect (16% and 17%, respectively).

By sector, businesses in accommodation and food services (29%), Information and communication (28%), and wholesale and retail (23%) were more likely to expect to employ people, while those in primary (5%), other services (7%) and arts and entertainment (8%) were least likely to do so.

4.3 Changes in levels of turnover

In the data tables accompanying this publication, table 136 shows the change in turnover compared with 12 months ago.

Around 34% of businesses with no employees (that had traded for at least one year) reported growth in turnover (value of sales) compared with the previous year, while a lower proportion reported a decrease (25%). However, businesses with no employees were most likely to report no change over the last 12 months (39%). Compared with 2024, there was a 7 percentage points increase in businesses with no employees that reported turnover growth in the last 12 months, and reported growth was back up to the level reported in 2023 (32%). In 2025, the proportion of businesses with no employees reported a decrease in turnover was at its lowest level since 2019 (32% in 2024, and 23% in 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 (27%, up 9 percentage points on 2024), while those in Scotland were most likely to do so (36%, up 2 percentage points on 2024). This compares with 34% in England (up 7 percentage points on 2024) and 31% in Northern Ireland (up 4 percentage points). Businesses with no employees in Scotland were least likely to report a reduction in turnover at 22% (down 6 percentage points on 2024), compared with 25% in England, 26% in Wales (both down 8 percentage points) and 28% in Northern Ireland (up 12 percentage points).

Businesses with no employees in the information and communication sector (57%) were the most likely to report growth in turnover, while those in administration were least likely to report turnover growth (23%).

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

Download Figure 3 chart data

4.4 Expectations of turnover in 12 months’ time

In the data tables accompanying this publication, table 140 shows the expected change in turnover in 12 months’ time.

Expectations of an increase in turnover in the next 12 months among businesses with no employees were consistent with those who reported an increase in turnover over the last 12 months (34%, up 2 percentage points on 2024 and up 6 percentage points on 2023). Fewer expected a decrease in turnover than reported a decrease in the last 12 months (17%, down 1 percentage point on 2024 and down 2 percentage points on 2023), and 44% expected turnover to remain at the same level over the next year (down 1 percentage point on 2024, and down 6 percentage points on 2023).

Registered businesses with no employees were more likely than unregistered businesses to expect turnover to increase over the next year (38%, compared with 32%), while 17% expected turnover to decrease across both unregistered and registered businesses, and unregistered businesses with no employees were more likely than registered businesses to expect no change (45% and 42%, respectively).

By sector, businesses with no employees in the information and communication sector were most likely to expect turnover to increase (58%), while those in the other services (22%) and professional and scientific (21%) sectors 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

Download Figure 4 chart data

4.5 Profit

In the data tables accompanying this publication, table 66 shows whether the business without employees generated a profit or surplus in the last financial year.

In 2025, 77% of businesses with no employees generated a profit or surplus in the last financial year (up 8 percentage points on 2024 and up 4 percentage points on 2023). This compared with 76% of SME employers in 2025.

Unregistered businesses were less likely to have generated a profit or surplus than registered businesses (74%, compared with 81%).

By sector, businesses with no employees in the construction (82%, 69% in 2024), and professional and scientific (82%, 79% in 2024) sectors were most likely to generate a profit or surplus, whilst those in the arts and entertainment sector were least likely to have done so (64%).

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

Download Figure 5 chart data

5. Exporting

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

In the data tables accompanying this publication, tables 47 to 51 show whether businesses exported goods or services.

Overall, 17% of businesses with no employees exported goods or services in the last year (up 1 percentage point on 2024 and up 6 percentage points on 2023). This is compared with 18% of SME employers that exported goods or services in the preceding 12 months.

Registered businesses were more likely to have exported than unregistered businesses (22% and 14%, respectively), with an increase of 3 percentage points on 2024 among registered businesses and no change among unregistered businesses.

Figure 6: whether sold goods or services or licensed products outside the UK in the last 12 months, 2025

Download Figure 6 chart data

Compared with 2024, there was an increase with businesses with no employees that exported in Northern Ireland (24%, 13% in 2024), Wales (15%, 13% in 2024), and England (17%, 16% in 2024). However, there was a decrease in exporting in Scotland (12%, 16% in 2024).

By sector, businesses with no employees that were more likely to export operated in retail and wholesale (37%, 34% in 2024), information and communications (37%, 32% in 2024), manufacturing (27%, 30% in 2024) and professional and scientific (21%, 24% in 2024). Those least likely to export were in primary (7%, 6% in 2024), other services (7%, 4% in 2024) and health (8%, 8% in 2024) sectors.

5.2 Destinations of exports

In the data tables accompanying this publication, table 54 shows the destination of exported goods or services.

Of businesses with no employees that exported in the last year, 66% exported to European Union (EU) countries (59% in 2024), while 70% exported to destinations outside the EU (73% in 2024).

After EU countries, the most frequently reported export destination was the USA (48%, 50% in 2024), followed by Canada (21%, 19% in 2024), European Free Trade Association (EFTA) countries (14%, no change on 2024), China (10%, 8% in 2024), India (5%, 6% in 2024), Turkey (5%, no change on 2024), and South Korea (4%, no change on 2024). Among businesses that exported, 24% reported exporting to the ‘rest of the world’ (33% in 2024).

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 2025, 18% of businesses with no employees imported goods or services in the previous year. This was 5 percentage points higher than in 2024, and 4 percentage points higher than in 2023. This compared with 24% of SME employers.

Registered businesses were more likely to have imported goods or services in the previous year than non-registered businesses (24% compared with 14%).

Figure 7: sources of imports for businesses with no employees

Download Figure 7 chart data

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 2025, 52% of current exporters planned to increase their exports over the next few years, which is a 16 percentage points increase on 2024 and a 3 percentage points increase on 2023. This compares with 46% of SME employer exporters.

Of businesses with no employees that did not currently export but who had a product or service suitable for exporting, 37% planned to export (3 percentage points up on 2024). This equated to 5% of all businesses with no employees and compared with 2% of SME employers.

Of businesses with no employees that have exported for 2 years or longer, 75% have had overseas sales every year since they started exporting (8 percentage points up on 2024), while 25% reported years without overseas sales. Among SME employers who exported, 72% 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 78 shows the types of finance that businesses without employees currently use.

Overall, in 2025, 53% of businesses with no employees were using some form of external finance (up 4 percentage points on 2024 and down 5 percentage points on 2023). It compares with 70% of SME employers (2 percentage points down on 2024 and 3 percentage points down on 2023)

Reflecting the pattern observed previously, registered businesses (64%, down 1 percentage point on 2024) were more likely to use external finance than unregistered businesses (45%, up 5 percentage points).

Businesses in the primary (75%), accommodation and food (70%) and retail and wholesale (65%) 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 (25%), bank overdrafts (18%), loans from a bank, building society or other financial institution (12%), loans from business partners, directors or owners (9%), loans from family and friends (8%), and leasing or hire purchase (8%). 

Over the last 3 years, the use of any form of so-called ‘alternative finance’ (in this instance, alternative finance refers to equity, factoring/invoice discounting, peer-to-peer (P2P) loans and some forms of ‘other finance’), not originating from banks, the public sector, or people known to the business, increased slightly. The use of alternative finance was reported by 5% of businesses with no employees (6% of SME employers).

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

Download Figure 8 chart data

6.2 Whether businesses sought external finance in the last 12 months

In the data tables accompanying this publication, table 82 and 83 shows whether businesses without employees sought external finance in the last 12 months.

Some 16% of businesses with no employees have sought external finance in the last 12 months; 4 percentage points higher than 2024 and 8 percentage points higher than 2023. This compared with 15% among SME employers.

Of the businesses with no employees, 10% sought external finance once, and 6% more than once.

Registered businesses with no employees were more likely to have sought external finance than unregistered businesses (20% and 13%, respectively). Compared with 2024, both types of business were more likely to have sought external finance (17% and 9%, respectively, in 2024).

By sector, businesses with no employees in the accommodation and food (31%), information and communication (29%), retail and wholesale (26%) and construction (20%) sectors were most likely to have applied for external finance in the previous 12 months.

For 41% of businesses with no employees sought external finance, this was the first time they had done so.

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

Download Figure 9 chart data

6.3 Type of external finance sought

In the data tables accompanying this publication, table 84 shows the types of external finance sought in the last 12 months.

In 2025, businesses with no employees that sought finance were most likely to have applied for a loan from a bank, building society or other financial institution (34%, 32% in 2024). Fewer sought finance through credit cards (28%, as in 2024) or via a bank overdraft facility (26%, 45% in 2024). Bank overdrafts were much less widely used by those seeking finance in 2025 compared with 2024. Next most common were loans from family/friends (24%, as in 2024)

More than twice as many businesses with no employees seeking finance sought it through equity finance, including crowd funding, than in 2024 (14% in 2025, 6% in 2024).

Other types of finance sought included government or local authority finance grants or schemes (11%, as in 2024), leasing or hire purchase (11%, 10% in 2024), commercial mortgages (7%, 10% in 2024) and loans from business partners/directors/owners (6%, 10% in 2024).

Compared with SME employers, businesses with no employees were as likely to seek finance through a loan from a bank or other financial institution (39% of SME employers), but more likely to seek finance through credit cards (16% of SME employers) or through a loan from family or friends (12% of SME employers. They were less likely to look to a bank overdraft facility as a source of finance (39% of SME employers) or to apply for leasing or hire purchase finance (22% of SME employers).

6.4 Intentions to apply for external finance in the next 3 years

In the data tables accompanying this publication, table 155 shows the likelihood of businesses without employees approaching external finance providers in the next 3 years.

Compared with 2024, more businesses with no employees considered it likely that they would approach external financial providers in the next 3 years (22%, 18% in 2024). Some 9% said it was very likely, and 13% said that it was fairly likely they would do so (7% very likely and 11% fairly likely in 2024).

Continuing the trend observed in previous years, registered businesses (27%) were more likely than unregistered businesses (19%) to say it was likely they would approach external financial providers in the next 3 years.

Businesses with no employees in information and communication (50%), accommodation (47%), and retail and wholesale (42%) sectors were more likely to report intentions to approach external finance providers in the next 3 years.

6.5 Trade credit and late payment (Cohort A)

In the data tables accompanying this publication, table 12 (Cohort A) shows whether businesses without employees give customers trade credit and table 15 (Cohort A) shows whether they have experienced problems with late payment.

In 2025, 31% of businesses with no employees reported that they give their customers trade credit (up 4 percentage points on 2024). The provision of trade credit among businesses with no employees is much lower than SME employers, 44% of which offer trade credit.

Registered businesses with no employees were significantly more likely to offer trade credit in comparison with unregistered businesses (44% compared with 25%).

Trade credit was most likely to be given by businesses in professional and scientific (44%), other services (43%) and accommodation (41%) sectors.

Late payment was considered a problem for 53% of businesses with no employees which gave trade credit (2 percentage points higher than in 2024). This includes 9% who thought it was a big problem (2 percentage points lower than 2024) and 44% who thought it was a small problem (4 percentage points higher than 2024).

This compares with 63% of SME employers who gave trade credit that considered late payment a problem.

7. Innovation activity

7.1 New or significantly improved processes in the last 3 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 3 years.

It is estimated that 18% of businesses with no employees innovated processes for producing or supplying goods or services in the last 3 years (up 4 percentage points on 2024 and up 3 percentage points on 2023). In comparison, 21% of SME employers innovated processes in the last 3 years in 2025.

Registered businesses with no employees were slightly more likely than unregistered businesses to have introduced process improvements (19%, compared with 17%). However, compared with 2024, there was a larger increase in process innovation among unregistered businesses with no employees than among registered businesses (up 4 percentage points and up 2 percentage points, respectively).

7.2 New or significantly improved goods or services in the last 3 years

In the data tables accompanying this publication, tables 101, 102 and 103 show whether the business has introduced any new or significantly improved goods or services in the last 3 years.

In 2025, 30% of businesses with no employees reported having introduced new or significantly improved goods or services in the last 3 years. This is compared with 26% of such businesses in 2024 and 31% of all SME employers. Registered businesses with no employees were more likely than unregistered businesses with no employees to have done so (32% and 28%, respectively).

In terms of sector, the highest prevalences of innovation in goods or services were in information and communication (55%), accommodation and food (44%), retail and wholesale (42%) and education (38%). In comparison, sectors associated with the lowest likelihood of having innovated were the primary sector (19%), administrative sector (19%), transport and storage sector (20%) and health and social sector (21%).

Figure 10: percentage of businesses with no employees which have introduced new or significantly improved goods or services, by registration status, 2025

Download Figure 10 chart data

7.3 Innovations which were new to market or industry

In the data tables accompanying this publication, table 104 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 had introduced new or significantly improved goods and services in the last 3 years, 38% had introduced goods or services that were new to the market (up 5 percentage points on 2024 and up 8 percentage points on 2023). Of those that had introduced new or significantly improved processes, 34% had introduced processes that were new to the industry (up 8 percentage points on 2024 and up 3 percentage points on 2023).

The sectors in which businesses with no employees that had introduced new or significantly improved goods or services were most likely to have introduced some that were new to the market were the information and communication sector (61%) and the wholesale and retail sector (58%).

Registered businesses with no employees were more likely to have innovated in the market (46%) compared with unregistered businesses (33%).

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

Download Figure 11 chart data

As in 2024, the major obstacle for business success most frequently mentioned by businesses with no employees in 2025 was market competition (40%; 35% in 2024, 37% in 2023). In contrast, SME employers were most likely to reference taxation (67%), which was cited by 37% of businesses with no employees (29% in 2024, 30% in 2023), followed by the level of energy prices (52%), which was cited by 36% of businesses with no employees (32% in 2024, 48% in 2023).

The reporting of other obstacles mentioned by around 1 in 4 businesses with no employees was consistent with 2024 rates of reporting, including regulations and red tape (30%; 25% in 2024, 32% in 2023, and 47% of SME employers), late payment (24%; 22% in 2024, 26% in 2023, and 29% of SME employers), and the UK’s exit from the EU (21%; 22% in 2024, 25% in 2023, and 29% 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 106 shows whether businesses with no employees have used external information or advice in the last 12 months.

In 2025, 22% of businesses with no employees reported seeking access to external information or advice (that is, more than just a casual conversation) in the previous 12 months, up 5 percentage points on 2024 and up 6 percentage points on 2019 to 2023). This compared with 28% of all SME employers.

Registered businesses (26%) were more likely to have sought information or advice than unregistered businesses (19%). Compared with 2024, there was a 4 percentage points increase among both registered and unregistered businesses.

Businesses with no employees in the information and communication (39%), primary industries (36%), and retail and wholesale (31%) sectors were most likely to have sought information or advice.

9.2 Purpose of information and strategic advice sought

In the data tables accompanying this publication, table 108 details reasons why businesses with no employees sought information or strategic advice in the preceding 12 months.

In 2025, businesses without employees were most likely to have sought information or advice on:

• Business growth (38%, 34% in 2024, 21% in 2023; 20% of SME employers in 2025)
• Financial advice for accounting and general running of the business (32%, 21% in 2024, 23% in 2023; 24% of SME employers)
• E-commerce and technology (21%, 14% in 2024, 6% in 2023; 7% of SME employers)
• Tax and national insurance law and payments (17%, 16% in 2024, 11% in 2023; 15% of SME employers)
• Marketing (17%, 22% in 2024, 15% in 2023; 11% of SME employers)
• Tax and national insurance law and payments (17%, 16% in 2024, 11% in 2023; 15% of SME employers)
• Improving business efficiency and productivity (17%, 12% in 2024, 15% in 2023; 14% of SME employers)
• Financial advice e.g. how and where to get finance (16%, 10% in 2024, as in 2023; 9% of SME employers)
• Regulations (15%, 10% in 2024, as in 2023; 12% of SME employers)
• Legal issues (12%, 11% in 2024, 12% in 2023; 16% of SME employers)

9.3 Sources of external information and strategic advice

In the data tables accompanying this publication, table 110 shows the sources of external information or advice.

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

• accountants (34%, as in 2024, 31% in 2023; 40% of SME employers in 2025)
• consultants, general business advisers (21%, 24% in 2024, 26% in 2023; 31% of SME employers)
• business networks, trade associations (21%, 23% in 2024, 22% in 2023; 17% of SME employers)
• internet search, Google, other websites (18%, 17% in 2024, 12% in 2023; 8% of SME employers)

In terms of sources available in the devolved nations, Business Gateway was quite significant as a source of information, advice and guidance in Scotland, where it is available (8%, as for SME employers), as was Scottish enterprise agencies (5%, compared with 7% of SME employers), while 9% of businesses with no employees in Wales mentioned Business Wales (11% of SME employers), and, in Northern Ireland, 17% of businesses with no employees mentioned Invest NI (13% of SME employers) and 2% mentioned the NI Business Information website (5% of SME employers).

9.4 How information or strategic advice was delivered

In the data tables accompanying this publication, table 112 shows how external information or advice was delivered.

Of those businesses with no employees that received information or advice, 34% reported receiving information or advice face-to-face (down 6 percentage points on 2024 and down 7 percentage points on 2023).

While face-to-face delivery had declined in comparison with 2024, there was an increase in those reporting delivery of information and advice through a website (23%, up 4 percentage points on 2024 and up 14 percentage points on 2023). Compared with 2024, there was a slight increase in delivery over email (20%, up 2 percentage points on 2024 but down 4 percentage points on 2023), and a slight decrease in those reporting receiving advice over the phone (18%, down 2 percentage points on 2024 and down 4 percentage points on 2023).

There was little difference between registered and unregistered businesses in terms of how information or advice had been delivered to them, however, registered businesses were more likely than unregistered businesses to report receiving it by email (22% and 18%, respectively).

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

In the data tables accompanying this publication, table 114 shows whether or not businesses with no employees that received advice paid for it and table 115 shows how much they paid for it.

Of businesses with no employees that received strategic advice in the last 12 months, 56% paid for it, up 2 percentage points on 2024 (In 2024, this question was not asked of businesses in Scotland). This compared with 66% of SME employers.

Among businesses with no employees that paid for advice, 29% paid less than £500 (up 3 percentage points on 20245), a further 12% paid between £500 and £999 (down 4 percentage points), 23% paid between £1,000 and £2,499 (up 1 percentage point), and 31% paid £2,500 or more (down 3 percentage points).

Businesses with no employees who paid for advice paid £11,000 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 (as in 2024, £1,800 in 2023).

10. Taxation

In the data tables accompanying this publication, tables 71 and 72 show how businesses with employees keep records for taxation.

In 2025, businesses with no employees who were categorised as sole proprietors or partnerships were asked about income tax self-assessment. Overall, 85% reported that they were liable to submit returns to HMRC for income tax self-assessment (up 3 percentage points on 2024). This compared with 94% of SME employers who were categorised as sole proprietorships and partnerships.

Businesses with no employees liable to submit returns for income tax self-assessment were most likely to keep paper-based records (55%) and spreadsheets (54%), followed by record keeping software (48%). This compared with SME employers that pay income tax through self-assessment, who were most likely to use record keeping software (69%), followed by paper-based records (57%), and spreadsheets (43%).

Compared with 2024, there was little change for businesses with no employees using paper-based records (54%) and spreadsheets (52%), but there was a 16 percentage points increase in the use of record keeping software (32%).

The use of record keeping software was more common among registered than unregistered businesses with no employees (65% and 40%, 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 2025, 55% of businesses with no employees used technologies or web-based software to sell to customers or to manage business (up 2 percentage points on 2024 and up 11 percentage points on 2023). This compared with 74% of SME employers (up 5 percentage points on 2024).

Registered businesses with no employees were more likely than unregistered businesses to have used these technologies (65% and 49%, respectively). 

By sector, businesses with no employees most likely to use these technologies were those in information and communication (89%), accommodation and food (86%) and wholesale and retail (66%) sectors, while those in other services (26%) and primary (39%) sectors were least likely to use them.

In terms of what these technologies were used for, similarly to SME employers, businesses with no employees were more likely to use these for managing the business than selling to customers online (47% and 26%, compared with 70% and 29% of SME employers, respectively).

By sector, businesses with no employees in information and communication (52%), accommodation and food (49%), retail and wholesale (46%) and arts and entertainment (44%) sectors were most likely to use technologies and web-based software to sell to customers online. Businesses with no employees in information and communication (82%) and accommodation and food sectors were most likely to have used it to manage the business.

Of the businesses with no employees that use technologies or web-based software to sell to customers or manage the business, accountancy software was most commonly used (56%, 82% of SME employers), followed by electronic invoicing (43%, 62% of SME employers) and AI (artificial intelligence) (42%, 34% of SME employers).

12. Future plans

12.1 Growth ambitions

In the data tables accompanying this publication, table 144 shows whether or not businesses with no employees aimed to grow sales over the next 3 years.

In 2025, 58% of businesses with no employees aimed to grow sales over the next 3 years. This was 1 percentage point lower than in 2024 and 8 percentage points higher than in 2023. Among SME employers, in 2025, 71% aimed to grow sales over the next 3 years (as in 2024 and 75% in 2023).

Figure 12: percentage of businesses with no employees that aim to grow sales over the next 3 years

Download Figure 12 chart data

Registered businesses with no employees were more likely to report an aim to grow sales compared with unregistered businesses (62% and 55%, respectively).

By sector, those most likely to be aiming to grow sales were in the retail and wholesale (80%), information and communication (76%), and accommodation and food (74%) sectors. While those in health (48%) and primary (49%) sectors 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 3 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 3 years.

Over the next 3 years, businesses with no employees reported having the following plans:

• 24% planned to develop and launch new products or services (25% in 2024 and 28% in 2023; 32% of SME employers in 2025)
• 21% planned to introduce new working practices (16% in 2024, 23% in 2023; 33% of SME employers)
• 17% planned capital investment in the UK (12% in 2024, 18% in 2023; 27% of SME employers)
• 17% planned to recruit new staff in the UK (13% in 2024, 19% in 2023; 44% of SME employers)
• 14% planned to work towards a target to reduce carbon/greenhouse gas/other emissions (18% in 2024, 33% in 2023; 30% of SME employers)
• 13% planned to invest in research and development (R&D) (10% in 2024, 14% in 2023; 19% of SME employers)
• 10% planned to increase export sales or begin selling to new overseas markets (12% in 2024, 12% in 2023; 14% of SME employers)

Some 47% of businesses with no employees did not plan to undertake any of the activities listed (21% of SME employers).

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 2025, 95% of businesses with no employees operated from a single site (based on those providing a response – unsure/refused removed), as in 2024 and similar to 2023 (94%). This is compared with 89% 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 accommodation and food (13%), and primary (11%) sectors were more likely to operate from more than one site.

13.2 Business premises in residential settings

In the data tables accompanying this publication, table 21 shows whether or not businesses with no employees work away from their home.

In 2025, 66% of businesses with no employees located the main work premises in their home. This was 4 percentage points lower than 2024, and the same as reported in 2023. It compared with 31% of SME employers in 2025.

Unregistered businesses with no employees were more likely to be operating from home than registered businesses (69% and 61%, respectively).

By sector, those in professional and scientific (80%), administration (76%), and primary (73%) sectors were most likely to be operating from residential settings. Those in retail and wholesale (41%), finance and real estate (54%), manufacturing (57%), other services (59%), and health (59%) sectors were least likely to be home-based.

13.3 Age of business

In the data tables accompanying this publication, table 17 summarises the years that businesses with no employees have been established.

Of all businesses with no employees, 25% had been trading for less than 6 years (20% in 2024 and 7% among SME employers). Some 17% started trading between 6 and 10 years ago (as in 2024), 25% between 11 and 20 years ago (26% in 2024), and 31% more than 20 years ago (33% in 2024 and 49% among SME employers).

Businesses with no employees in the retail and wholesale (46%), information and communication (44%), accommodation and food (37%) and transport and logistics (35%) sectors were most likely to have traded for less than 6 years. Businesses with no employees in primary (48%) and other services (41%) sectors were most likely to have traded 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 (54%, 60% in 2024 and 46% in 2023). This compared with 7% of SME employers.

Some 31% of businesses with no employees were private limited companies, limited by shares (Ltd) (up 4 percentage points on 2024 and down 8 percentage points on 2023). This compared with 74% of SME employers (as in 2024). A further 4% of businesses with no employees were partnerships (down 2 percentage points on 2024), and 3% were private limited companies limited by guarantees (down 1 percentage point).

Unregistered businesses were more likely to be sole proprietors than registered businesses (65% and 37%, respectively). Registered businesses were more likely than unregistered businesses to be private companies limited by shares (Ltd) (48% and 20%, respectively) or to be partnerships (9% and 1%, respectively).

Businesses with no employees in the finance and real estate (58%), construction (43%) and professional and scientific (42%) sectors were most likely to be private limited companies, limited by shares (Ltd). Sole proprietorships were most common in accommodation and food (81%) and manufacturing (79%) sectors, while partnerships were most common in primary sectors (42%).

13.5 Number of owners/partners/directors

In the data tables accompanying this publication, tables 24, 25, 26, 27 and 28 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 (85%) had no directors in day-to-day control of the business who were not owners or partners (compared with 62% of SME employers). Most of the remainder (9%) had one director (18% of SME employers).

The majority of businesses with no employees had no more than one owner, partner or director (73%, compared with 18% of SME employers); 18% had 2 owners, partners or directors; 6% had between 3 and 5, and 2% had 6 or more.

Unregistered businesses were more likely than registered businesses to have no more than one owner, partner or director (81% compared with 62%).

By sector, businesses in other services (85%), transportation and storage (82%), manufacturing (81%) and professional and scientific (80%), sectors were most likely to have no more than one owner, partner or director.

Overall, 84% of businesses with no employees were majority owned by the person or family who set them up (compared with 69% of SME employers). Nearly all family-owned businesses reported that the person or family who majority-owned was actively involved in managing the business (84%, compared with 67% of all SME employers).

13.6 Women-led businesses

In the data tables accompanying this publication, tables 38 and 39 summarise the extent to which businesses with no employees are led by women.

In 2025, 24% 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 compared with 30% in 2024, 18% in 2023, and compared with 19% of SME employers in 2025.

Women-led businesses accounted for 30% of unregistered and 14% of registered businesses, compared with 37% and 18%, respectively, in 2024.

By sector, women-led businesses with no employees were most common in health (46%), other services (41%), and education (33%). Women-led businesses were least common in construction (4%), transport and storage (9%), and primary (12%) sectors.

13.7 Minority ethnic group-led businesses

In the data tables accompanying this publication, table 40 summarises the extent to which businesses with no employees are led by someone from an ethnic minority group.

In 2025, 9% of businesses with no employees 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 up 3 percentage points on 2024 and 2023 and compared with 6% of SME employers in 2025.

There was no difference in the proportion of businesses which were MEG-led between registered and unregistered businesses (9%, respectively).

By sector, those in the information and communication (20%), accommodation and food (18%), wholesale and retail, and education (13% for both) sectors were most likely to be MEG-led. In contrast MEG-led businesses were least common in the primary (1%), other services (4%), arts and entertainment (5%) and construction (6%) sectors.

13.8 Business leaders with a disability

In the data tables accompanying this publication, table 32 shows the number of owners, directors or partners with a disability, table 36 shows whether the sole owner has a disability, while table 41 shows whether businesses with no employees are classified as led by people (someone) with a disability.

Of the businesses with no employees that had more than one owner, director or partner, 11% reported one or more having a disability (9% among SME employers). This was higher among unregistered businesses than registered businesses with no employees (15% and 6%, respectively).

By sector, businesses with no employees in arts and entertainment (25%), health, education and other services (21%, respectively) sectors were most likely to have at least one owner, director or partner with a disability.

Where there was just one owner, 8% were reported to have a disability (5% among SME employers). Again, this was higher among unregistered businesses than registered businesses with no employees (10% and 6%, respectively).

By sector, sole owners with a disability were most common in the arts and entertainment (18%) and professional and scientific (13%) sector.

About 7% of businesses with no employees reported being led by people with a disability (5% among 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 5% of registered businesses.

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

13.9 Business leaders that have served in the armed forces

In the data tables accompanying this publication, table 34 shows the number of owners, directors or partners that have served in the armed forces, table 37 shows whether the sole owner is an armed forces veteran, while table 43 shows whether the SME employer is classified as led by a veteran (or veterans) of the armed forces.

When asked (for the first time in 2025) if any owners, directors or partners had previously served in the armed forces, of those with more than one owner, director or partner, 6% reported one or more as a veteran (6% among SME employers). This was slightly higher among unregistered than registered businesses with no employees (7% and 5%, respectively).

Where there was just one owner, 3% were reported to be a veteran (as among SME employers); 3% among unregistered businesses with no employees and 2% where registered.

Overall, 3% of businesses with no employees were led by a veteran of the armed forces, which was the same proportion as reported among SME employers.

14. Accompanying tables

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

• Longitudinal Small Business Survey 2025: businesses with no employees – data
• Longitudinal Small Business Survey 2025: businesses with no employees – data – Cohort A
• Longitudinal Small Business Survey 2025: businesses with no employees – data – Cohort B
• Longitudinal Small Business Survey 2025: 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 autumn 2026. 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 2025 Longitudinal Small Business Survey (LSBS), a large-scale telephone CATI (Computer Assisted Telephone Interviews) and online CAWI (Computer Assited Web-based Interviews) survey of 10,481 UK small business owners and managers, commissioned by the Department for Business, Innovation, Science and Trade (formerly 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 2025 survey was conducted between October 2025 and April 2026 by BMG Research Ltd.

The 2025 survey follows surveys conducted annually since 2015. Sample bases for each year from 2015 to 2025, are summarised in Table 1. The 2015 survey was the largest SBS 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
2025	10,481
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 2025, 4,629 top up interviews were conducted. This was in addition to 5,832 interviews with enterprises that had already completed at least one LSBS survey between 2015 and 2024. Top-ups were needed for the following reasons:

• to represent sections of the SME population that were not active in the 2024 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 20.0 minutes (17.2 minutes for panellists, 22.9 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, and so on)
• 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), and so on
• the characteristics of their owners and leaders

There are 3 main reports based on the 2025 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 2025 up to and including the first quarter and first half of the second quarter of 2026
• 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

Some 20 of the 10,481 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 10,611 interviews conducted in 2024, 8,919 (84%) agreed to a follow-up interview. The objective was to obtain the highest possible number of repeat interviews with these panellists. 4,406 were interviewed between October 2025 and April 2026 (49%, lower than in 2024 – 57%, and 2023 – 54%, 2022 – 60% and 2021 – 62%). Of these, 706 had no employees, 12 were large businesses with 250 or more employees, and the remainder (3,700) were SME employers. This group is known as the ‘full panel’.

In addition, 9,389 businesses interviewed from 2015 to 2023 but not in 2024 could be re- approached for interview (they had given permission for re-interview and had not refused to take part between 2015 and 2023 and had not ceased trading). 1,426 of these were interviewed in 2025, a response rate of 15% (16% in 2024, 18% in 2023, 16% in 2022 and 18% in 2021), of which 196 had no employees, 1,230 were SME employers, and 8 were large businesses with 250 or more employees. This group is known as the ‘past panel’.

In addition to these, 4,629 ‘top-up’ interviews were conducted, of which 1,537 had no employees and 3,092 were SME employers. As a result, the total sample size in the 2025 survey was 10,481, of which 2,439 had no employees, 8,022 were SME employers and 20 were large employers (250 or more employees).

The top-ups were sampled using a method consistent with the 2015 to 2024 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 with 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 Market Location 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 2025, as 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 Department for Business and Trade (DBT) Business Population Estimates (BPE) publication 2025 estimated around 5.7 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). For unregistered businesses with no employees, therefore, a database from the commercial database provider Market Location was used to identify these businesses that were missing from the IDBR. 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.

The targets within the sample stratification matrix were informed by the 2024 BPE, the latest available at the start of fieldwork. However, survey findings were weighted to the 2025 BPE which were published a few months into the fieldwork period. The 2025 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 2024 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 2024 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 10 questionnaire.

Based on the whole sample, the response rate for full panellists was 49%, 8 percentage points lower than in 2024 and 5 percentage points lower than in 2023. For past panellists the response rate was 15%, 1 percentage point lower than in 2024 and 3 percentage points lower than in 2023. For IDBR top-ups the response rate was 4%, as in 2024 and 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 2025 was 2,439.

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, the department 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 2025 cohort: 3,566 in Cohort A, 3,503 in Cohort B and 3,412 in Cohort C. While within the main telephone and SME employer sample each respondent is part of one cohort only, respondents who took part in the survey via a commercial panel were asked all questions. Where a business is in each of the datasets from 2018 to 2025, its cohort for 2025 is entirely independent of its cohorts between 2018 and 2024 (for example, knowing a business was in Cohort A in 2018 tells you nothing about which cohort it is in in 2025). 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, some of these sectors are grouped together: ABDE, labelled as ‘primary’, comprises:

• (A) agriculture, fishing and forestry

• (B) mining and quarrying

• (D) electricity and gas

• (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 115,900 non-employing businesses in this sector in 2025, of whom 13% were unregistered businesses
• C (manufacturing) – there were 179,000 non-employing businesses in this sector in 2025, of whom 74% were unregistered businesses
• F (construction) – there were 692,000 non-employing businesses in this sector in 2025, of whom 72% were unregistered businesses
• G (retail and wholesale) – there were 306,005 non-employing businesses in this sector in 2025, of whom 50% were unregistered businesses
• H (transport and storage) – there were 283,600 non-employing businesses in this sector in 2025, of whom 76% were unregistered businesses
• I (accommodation and food service) – there were 86,700 non-employing businesses in this sector in 2025, of whom 40% were unregistered businesses
• J (information and communications) – there were 276,200 non-employing businesses in this sector in 2025, of whom 60% were unregistered businesses
• KL (financial and real estate) – there were 165,900 non-employing businesses in this sector in 2025, of whom 46% were unregistered businesses
• M (professional and scientific) – there were 632,500 non-employing businesses in this sector in 2025, of whom 64% were unregistered businesses
• N (administrative services) – there were 352,900 non-employing businesses in this sector in 2025, of whom 72% were unregistered businesses
• P (education) – there were 290,200 non-employing businesses in this sector in 2025, of whom 52% were unregistered businesses
• Q (human health and social work) – there were 333,900 non-employing businesses in this sector in 2025, of whom 90% were unregistered businesses
• R (arts and entertainment) – there were 248,000 non-employing businesses in this sector in 2025, of whom 85% were unregistered businesses
• S (other services) – there were 307,800 non-employing businesses in this sector in 2025, of whom 90% were unregistered businesses

More detail on the sectors is available in the 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

Users might wonder if the sample we have used is adequately representative of the target population (the UK SME population). We have drawn our sample from 3 sampling frames. One is the IDBR from the Office for National Statistics (ONS), which has excellent coverage of registered businesses in the UK, as it is regularly updated with information from HMRC and ONS surveys. We use the commercial database provider, Market Location to provide us with a sample of unregistered businesses, and also a commercial panel to access a wider range of businesses not registered for VAT or PAYE.

The coverage of the unregistered business population is less well understood. It is likely that the Market Location frame is good for well-established businesses that advertise their presence in trade directories for example. Small businesses that rely on word of mouth, or platforms such as Facebook or Instagram for business and have no wish to expand are unlikely to be included in either of the sampling frames.

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, and so on, 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 77% of businesses with no employees in 2025 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 75%, or 79%, 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 69%, and we are 95% confident that the true value is in the range from 75% to 79%.

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 +/- 1.2%. So, our confidence interval around the 10% estimate is 10% +/-1.2%, that is, from 8.8% to 11.2%. 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 +/-1.8% instead of +/- 1.2%, 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 by non-employers – £59,100.

Table 2 cannot be used to produce a confidence interval for this estimate, though it can be done, it is +/- £14,600. The underlying data tables published alongside this report contain ‘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	2,439	1.2	1.8	2.0
England	1,928	1.3	2.0	2.2
Scotland	207	4.1	6.2	6.8
Wales	172	4.5	6.8	7.5
Northern Ireland	132	5.1	7.8	8.5
Unregistered businesses without employees	894	2.0	3.0	3.3
Registered businesses without employees	1,545	1.5	2.3	2.5
ABDE. Primary sector	138	5.0	7.6	8.3
C. Manufacturing	166	4.6	7.0	7.6
F. Construction	325	3.3	5.0	5.4
G. Retail and wholesale	264	3.6	5.5	6.0
H. Transport and Storage	99	5.9	9.0	9.8
I. Accommodation and Food	69	7.1	10.8	11.8
J. Information and communication	210	4.1	6.2	6.8
KL. Finance and real estate	110	5.6	8.6	9.3
M. Professional and scientific	415	2.9	4.4	4.8
N. Administration and support	156	4.7	7.2	7.8
P. Education	162	4.6	7.1	7.7
Q. Human health	87	6.3	9.6	10.5
R. Arts and entertainment	117	5.4	8.3	9.1
S. Other services	121	5.3	8.2	8.9

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 Statistically significant differences

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 (37%, 34% in 2024), information and communications (37%, 32% in 2024), manufacturing (27%, 30% in 2024) and professional and scientific (21%, 24% in 2024). Those least likely to export were in primary (7%, 6% in 2024), other services (7%, 4% in 2024) and health (8%, 8% in 2024) 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 – that is, they were more likely to than average. Similarly, we are 95% confident that the 4 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, Czechia, 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, and so on). 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 1 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. 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.
Veteran-led business	A business where at least half of the leadership team is reported as having served in the armed forces previously.
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, Innovation, Science and Trade (BIST) intends to continue the survey for at least another wave. Fieldwork begins in October and runs up until the end of April each year. Interviewing for the 2025 survey took place between the 27 October 2025 and the 30 April 2026. We anticipate that the field dates for the 2026 survey will be similar to those of 2025.

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 2025 survey, will be published in autumn 2026.

The Scottish Government usually produces its own publication based on the same data but focused on Scottish businesses Small Business Survey Scotland: 2024 to 2025

BIST 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 BIST 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 Digital, 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. BIST and DCMS worked to improve the survey questions used to identify social enterprises, with the new questions being used in the 2017, 2019, 2021, 2023 and 2025 surveys.

The Department for Education (DfE) conducts the Employer Skills Survey. The 2024 Employer Skills Survey was published in July 2025.

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.

BIST 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.

As mentioned, 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 2026 for research teams to apply for small grants to conduct research using the latest LSBS data. Previous research papers are available.

The data will continue to be made available by the ONS Secure Research Service and the UK Data Service for approved researchers. The Family Business UK 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.

18. 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.

The following is the list of roles for people who received pre-release access to Longitudinal Small Business Survey 2025:

• BIST Parliamentary Under Secretary of State
• BIST Special Advisers
• BIST Director, Analysis
• BIST Press Officers x2
• BIST SME Analyst x2
• Scottish Government Analyst x 2

19. Contact

Responsible statistician: Jayshree Varsani.

Email: business.statistics@businessandtrade.gov.uk

Media enquiries: 020 7215 2000

Public enquiries: 07741 703241