Website of the UK government

Small businesses in the UK

Currently there are five million small and medium-sized enterprises (SMEs) in the UK, providing 60 per cent of jobs and half of the UK's gross domestic product (GDP).

The government says that starting up a business should be quick, simple and a viable option for everyone. Reducing the burdens associated with getting started allows new businesses to enter markets faster and in better shape. It will also encourage other would-be entrepreneurs to seriously consider starting up.

The government plans to tackle any 'institutional bias' that work against people on Jobseeker’s Allowance or in social housing from moving into self-employment.

Measures to support new businesses

The proposals include:

Simpler registration for new businesses

The government will introduce a simple incorporation service (the process of legally creating a business) in April 2011. It will reduce the number of forms needed to register a business in Autumn 2011.

New Enterprise Allowance scheme

The new Enterprise Allowance scheme will provide access to mentors and small loans to help unemployed people start a business. Early testing will start in January 2011 before a full roll-out from April 2012.

Allow social tenants to start up their business at home

There are currently barriers that prevent social tenants from applying to start up a business based in their home. The government says that it will remove those barriers by working with social landlords to encourage their tenants to develop entrepreneurial skills.

Housing Minister Grant Shapps said: "Tenants should have the same opportunities as anyone else, and landlords have the key to unlocking this untapped entrepreneurial talent. I want them to get the message out loud and clear to their residents that wherever possible, and in the majority of cases, they will be able to set up and run their new businesses from home."

Jobcentre Plus to promote business start-ups

Later this month Jobcentre Plus will be running a campaign across all of its Jobcentres. Its advisers will send people interested in starting their own businesses towards the support available to business start-ups. They will also explain opportunities for running franchised businesses.

In countries such as the USA, franchising opportunities make up a far greater proportion of the opportunities for people to move back into work following unemployment.

Access to finance and public contracts

Today's package of support for small businesses also included measures to improve access to finance, and to make it easier to do business with the public sector.

The government announced that schemes such as the Enterprise Finance Guarantee and Enterprise Capital Funds will continue.

It also set a goal to have a quarter of government procurement directed to SMEs. Government agencies will aim to remove qualifying barriers that prevent small businesses accessing government contracts. The government also confirmed a commitment that 80 per cent of prime contractors are paid within five working days. All government contractors will be required to pay their suppliers within 30 days if they wish to benefit from departments’ procurement.

Further information

The government's plans for small business are published in a document today called 'Backing small business’.

• 'Backing small business' November 2010 (PDF, 43KB) Opens new window

• Help with PDF files