Is your small business recognised or ‘invisible’?

Entrepreneur Tina Boden discusses what 'invisible businesses' are and why they aren't being counted in statistics.

Statistics show there are 4.5 million trading micro-business owners, those employing between zero and nine people, across the UK and, with government schemes encouraging people that may be unemployed or lost on their current career path to start their own business, this figure is on a gradual increase.

The current government hopes a further 500,000 people will start a business over the next 12 months; one in seven of the adult workforce in the UK are running their own business at the moment.

However, before anybody else steps out as a self-employed personal trainer, starts up their own chauffeur business or launches a balloon shop on their local high street, we need to understand current statistics for trading micro-businesses are not accurate; many sole traders are not being counted.

Statistics should reflect a much higher level, hundreds of thousands of them in fact, but many micro-businesses fall below the government measuring stick. These invisible businesses are not counted in national statistics as a trading company but are making a difference to the owner, the community and the national economy and should be recognised.

How is a business measured?

Many people believe if they are registered with HM Revenue & Customs as a sole trader, something you should do immediately if you have embarked on the path of self employment whether full-time or on a part-time basis while you continue in an employed role, and are paying tax, that their business will be included in figures quoted in research, via media or found on the internet showing the number of trading micro businesses across the United Kingdom. Unfortunately this is wrong and though to some it may not matter, to many it does.

To establish if your are a recognised business or an invisible business take a few seconds to answer the questions below:

  • Does your business employ staff ?
  • Is your business a limited company ?
  • Is your business VAT-registered ? 

Businesses that answer no to all the above fall in the ‘invisible business’ category.

To be recognised as a trading business by the UK government you have to answer yes to at least one of the above questions.

Many sole traders do not want to employ staff any more, they would rather work with associates or subcontractors. One of my businesses is called Only Me Here for that very reason; I am a micro-business specialist but would class myself as a generalist. As part of my Only Me Here work I help people look at their overall business strategy, establishing how they need to make changes to develop their business and when that is done I call in my Micro Biz Buddies (the title I give to the Associates I work with), those that specialise in the area of work we have established the micro-business needs as part of the growth plan that has been developed.

Only Me Here is not a limited company, I did not feel the need to register this business with Companies House adding an additional layer of administration to my annual workload nor does the business turnover more than £79,000 per year.

£79,000 is the current level of turnover above which you should be VAT registered. Having a high level of turnover may be important to some businesses but profit is one of the most important things a business can have; ‘Turnover is vanity – Profit is sanity’ is one of my favourite business quotes.

So, I answer no to all the above questions and therefore I own an ‘invisible business’. And yes this does bother me, I want to be counted – I believe I am making a difference to the national economy, I pay tax and National Insurance contributions.

How many ‘invisible businesses’ are there in the UK?

‘Invisible business’ is something I am regularly discussing with different organisations; as co-founder of Enterprise Rockers, an independent community interest company, working to make life better for micro-business owners I believe it is important every trading micro-business should be recognised. Only recently in a conversation with Matt Wilton of Leeds City Council about invisible business he advised me that they estimate there are 15,000 businesses in the their area that fall into this category, Tim Frenneaux of York, North Yorkshire and East Riding Local Enterprise Partnership estimates as many as 30,000 businesses in their area are ‘invisible businesses’ – if there are an estimated 45,000 invisible businesses in this small area of Yorkshire how many are there in the whole of the UK?

Lets ensure every micro-business owner is counted

It is important that statistics reflect all those businesses and business owners that are making a difference to the national economy.

Let us recognise everyone for the work they do and the contribution they make as part of the business community of the UK even if they are the micro-est of micro. After all if these people were not running their businesses what would they be doing? Claiming unemployment benefit possibly and then they would be a statistic.

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