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SMEs pump billions through local economies

Small and medium sized business channel billions of pounds into local economies, according to new research released by Yorkshire Bank.

Two thirds of an annual turnover of £1,500bn is kept within the local economy because SMEs do the majority of their business with companies nearby.

Yorkshire Bank found that 57% of SMEs use suppliers within a 10 mile radius of their business, while 30% source within a 25 mile radius.

SMEs also said they do up to half their business with local customers that live no further than 10 miles away.

London-centric SMEs produce nearly £250bn turnover annually, while the North West generates £149bn, Yorkshire and the West Midlands each yield £109bn, and the South West provides £140bn each year.

Speaking for the whole of the UK, Yorkshire Bank’s regional director for the East, Alan Young said: “Small businesses are the very heart of local communities and the life-blood of their economies, from the newsagent to the garage owner to the family-run manufacturer or engineering firm. Our economy is reliant on them to generate wealth and jobs.

“These businesses may be small, but they are responsible for almost two thirds of jobs and half the turnover of all British business.

“The success of these small businesses, from the sole trader upwards, is the key to growth not just in local economies, but in the recovery of the UK as a whole.”

A total turnover figure from the Department of Business Innovation and Skills showed that SMEs bring in around £1,500bn annually, although Yorkshire Bank admitted that much of this cash is down to internet sales.

The bank’s survey showed that on average, each of the UK’s SMEs is responsible for employing three people, and produces £330,000 turnover yearly.

This was posted in Bdaily's Members' News section by Miranda Dobson .