Despite challenging conditions, the number of UK digital micro-businesses turning over more than £100,000-a-year grew substantially during 2023.
Small online businesses with less than ten employees are doing better than ever, according to the latest findings from the Venture Forward research initiative conducted by GoDaddy. This multi-year study is following the fortunes of the UK's micro-businesses and its latest results suggest that trading online is key to financial success.
Almost a fifth (17%) of UK micro-businesses that operate online now have an annual turnover of over £100,000 - up 55% compared to 2022 when just 11% of digital micro-businesses were making six figure sums.
The growth is similar for micro-businesses bringing in over £50,000 - the number of micro-businesses achieving this turnover stands at 33% today, up from 25% last year. In comparison, the median annual earnings for full-time employees in the UK was approximately £34,963 in 2023.
Launch to £100k in three years
GoDaddy's data shows the value of ecommerce for fast-growth businesses. It has found that 55% of entrepreneurs who own micro-businesses that are turning over more than £100,000 annually say that their website provides the main source of their income. Of these businesses, over half (54%) were started in the past three years, demonstrating the speed at which successful digital businesses can be built.
Many digital micro-businesses required relatively small initial investments to get off the ground suggesting that starting a digital business does not need to cost a lot:
- 43% were started with less than £5,000 of initial capital;
- 21% said their company cost them as little as £500 to create.
While it may not take a lot of money to start a business, it certainly seems to pay if you put in enough hours. The results of the survey show that 58% of owners with £100,000-a-year micro-businesses work over 40 hours a week on their venture, whilst only 27% of all micro-business owners said they do the same.
"It is remarkable to see that so many entrepreneurs have built six figure businesses - many with very minor initial investment - and that the trend is going upwards. It is testament to the strength of Britain's small business community, and the fact that British entrepreneurs really are unstoppable. Entrepreneurs who operate bricks and mortar only businesses are potentially missing out on huge growth at minimal cost, so there has never been a better time to diversify and sell in more ways." Andrew Gradon, head of GoDaddy UK & Ireland.
The study also reveals that one in three micro-businesses in the UK are run by "breadwinners", contributing 51% or more to household income. About one in four women with a micro-business in the UK are the breadwinners in their home. The opportunities offered by setting up an online presence are predicted to continue in 2024, as 83% of people who own £100,000+ micro-businesses are optimistic for growth.
Written by Rachel Miller.
