The Small Business Manifesto

Generation Growth:

The Small

Business

Manifesto

Unlocking the economic

potential of UK small businesses

Foreword 04

'Why SMEs Matter:

The ‘Productivity Heroes’

That Can Reignite the UK Economy' 06

Small Businesses Owners Principles for Government 08

The Policy Asks of Small Business Owners 09

Key Headlines:

Going for Growth 10

Talent & The Workforce:

Combatting the Skills Crisis 12

Access To Finance:

Fuelling the Engines of Growth 14

Taxation & Trading:

Getting Growing 16

International Markets:

The UK's Role in the World 18

Infrastructure:

Curating an Environment for Growth 20

Climate Transition:

Sustaining Business Sustainably 22

Artiﬁcial Intelligence:

The New Growth Frontier 24

Methodology & Acknowledgements 27

Small businesses are essential

to the UK economy, contributing

50% of UK GDP, pushing the

frontier of innovation and creating

jobs. Policymakers and the wider

ecosystem must work together

to support these SMEs and

sustain the pipeline of future

entrepreneurs through enterprise

and ﬁnancial management

education in schools.

Jill Pay

Chairman of The Gender Index

We all rely on small businesses in our daily lives. They make up 99% of the 5.51 million UK companies

- delivering jobs, growth and prosperity for millions of people. But they need and deserve more public

attention – and crucially they need more help. Our message is clear: prioritise small businesses –

and the whole economy will reap the beneﬁts. We need action on tackling the skills crisis, reforming

business rates, improving planning and a VAT system that incentivises growth. The BCC is pleased

to support the Goldman Sachs 10,000 Small Businesses programme – a scheme which shows how

big ﬁrms can help and support small businesses to thrive. Partnership working is essential.

Alex Veitch

Director of Policy and Insights, British Chambers of Commerce

The UK provides a fertile ground

for innovation to thrive, but a

lack of sucient patient capital

continues to hold back some

UK companies from scaling up

and fulﬁlling their commercial

potential. As the UK’s largest

domestic investor in UK venture

and venture growth, we are

increasing both access to, and

availability of, long-term, patient

ﬁnance, but more needs to be

done to really help build the

UK’s innovation economy.

Stephen Welton CBE

Chair, British Business Bank

There remains persistent challenges in the UK

to scaling up in terms of accessing markets,

talent, ﬁnance and having the space to grow.

This report Manifesto chimes with a range of

research undertaken by the ScaleUp Institute

and reﬂects on important areas to focus on as

we head forward to 2025 and build solutions

to foster business growth across the UK.

Irene Graham OBE

CEO, ScaleUp Institute

Small businesses are central to the

economy and where we all start. If we

can do a better job of supporting their

needs, and spotting and turbocharging

successes, we will also generate

larger competitive businesses and

become a Greater Global Britain.

Tom Adeyoola

Co-Founder, Extend Ventures

Why are small businesses important? We are

the life-blood of the communities. We listen

attentively to our customers and drive innovation,

spot opportunities, foster competition and create

jobs. Small business is essential for a diverse,

thriving local economy. It's where the next giants

are born that's why small businesses matter!

Gurinder Dhillon

Founder of Otto Car & 10,000 Small Businesses UK Graduate

Small businesses are the

heartbeat of our economy.

It's imperative that the next

government champions our

needs, ensuring a thriving

environment for sustained

growth and prosperity for all.

Byron Dixon OBE

CEO of Micro-Fresh International &

10,000 Small Businesses UK Graduate

We, as SMEs, are the backbone of the

economy, fuelling job creation and driving

innovation. Our nimbleness enables us to

adapt rapidly, embracing everything from

cutting-edge technology to sustainable

practices. This agility is key in boosting

local economies and fostering growth

opportunities. We urge the next government

to prioritise entities like ours to cultivate a

prosperous, inclusive economic landscape.

Rana Harvey

Managing Director of Monster Group &

10,000 Small Businesses UK Graduate

Every small business started in the UK is a

vote of conﬁdence in the future. A start-up

ready to trade, a scale-up with the potential

to grow. It’s why the UK’s productivity

challenge can only be fully answered by

liberating the potential of our small ﬁrms.

To do so will require an unparalleled team

eﬀort between policymakers and the wider

business support ecosystem. Working

together, we can create the progressive

conditions for a generation of growth.

Michael Hayman MBE

Co-founder and Chair, Seven Hills

Only 1 in 3 UK entrepreneurs are

female, equivalent to 1.1 million

missing businesses. If we want to

drive a new generation of growth,

then we need to see more support

for women-led businesses, with a

policy environment that enables

them to grow and prosper.

Sahar Hashemi OBE

Founder of Buy Women Built

Contents

Testimonials: The Importance of Small Business

Small businesses are the engines of UK growth and have the power to

transform communities. But the life of a small business owner is fraught with

uncertainty – not least in the current economic context. And when small

businesses are unsure of their future, that should give pause to the communities,

consumers and corporations who interact with them every single day.

This is not a niche part of our economy but 99% of all

private sector enterprises, 61% of total employees and

53% of total turnover

. Without small businesses there

can only be limited growth, vitality and resilience in the

UK’s story. As we look to seize future opportunities, it

is small businesses that are poised to drive innovation

and growth, and who can help to shape the landscape

of tomorrow across every region of the country.

Of these businesses, more than a million have been

operating for more than three years. Yet only 37% grew in

productivity terms in 2022 and, just 3% are what can be

termed ‘Productivity Heroes’

– those who are growing

their turnover at a faster rate than their headcount,

while also increasing their number of employees.

This report is about exploring the economic

potential of this small number of Productivity Heroes

– just over 36,000 in the entire small business

population – and what could be achieved if we were

to support more companies to join their ranks.

It is imperative that policymakers continuously inquire

about the nuanced needs of small businesses across

the UK, while taking their lead from the Productivity

Heroes who demonstrate best practice and can inspire

a new generation of growth. Too often their voices

have been overlooked in the corridors of policy making,

yet it is these SMEs (Small and Medium Enterprises)

who have an indispensable role to play in shaping

the narrative and sparking UK productivity into life.

At Goldman Sachs, we have a proud history of

recognising the importance of the UK’s small business

owners and helping them reach their full potential. Since

launching our 10,000 Small Businesses (10KSB) UK

programme in 2010 we have worked with over 2,200

business owners in collaboration with our academic

partners. These business owners are from a wide range

of sectors, right across the UK – what unites them is

their unrelenting desire for growth. Growth in terms

of revenue, jobs, proﬁt, impact, and productivity.

But the speed and scale with which these

businesses can grow is too often predetermined by

uncontrollable factors: their location, or the gender

or ethnicity of the founder – leading to barriers

in accessing ﬁnance, infrastructure, and talent.

Policy must therefore counteract these imbalances,

facilitating sustainable growth. This focus would

not just be to the beneﬁt of small business owners

themselves, but to the UK’s shared prosperity.

This Manifesto has been developed through

dialogue and research with our 10KSB UK alumni

population. They are a signiﬁcant sample of fast-

growth small business leaders from across the

country. They are the Productivity Heroes.

It is this cohort from which we should take lessons

if we want to enable businesses in every corner

of the country to grow at scale. As the ﬁndings of

this report illustrate, the economic opportunity

of doing so is too good to miss out on.

This is the moment to propel small businesses

to the forefront of policy discussion and ensure

that their needs are not only acknowledged

but form the bedrock of policies that will

help shape the UK’s economic future.

That is why this Manifesto outlines the principles

and policy suggestions of small business owners.

It is not intended as an exhaustive document and

seeks to build on the excellent explorations of

relevant topics in the past. It aims to serve as

a catalyst for dialogue that policymakers can

extract insights and interrogate solutions from.

Because what matters to small business owners

matters to the whole country. With that lens, there

is the potential to unleash a new generation of

growth and propel the economy forward.

Charlotte Keenan

Head of the Oce of Corporate Engagement

International, Goldman Sachs

Foreword

“ There is the potential to

unleash a new generation

of growth and propel the

economy forward.”

- Charlotte Keenan

Head of the Oce of Corporate Engagement International

Department for Business and Trade, 2023

Hart, M and Bonner, K (2024) “Productivity Puzzles, Long Tails and

Productivity Heroes: developing a new focus for small business

policy in the UK”, ERC Insight Paper, February 2024

Roni Savage

Jomas Associates,

London, 10,000 Small

Businesses UK Graduate

National Institute of Economic & Social Research, Productivity in the UK: Evidence Review, June 2022

Oce of National Statistics, Business population estimates for the UK and regions 2023

This data and all of the data relating to ‘Productivity Heroes’ has been supplied by our academic partners at the Enterprise Research Centre, including data taken from Hart, M

and Bonner, K (2024) “Productivity Puzzles, Long Tails and Productivity Heroes: developing a new focus for small business policy in the UK”, ERC Insight Paper, February 2024

See footnote 6

Statista, Gross domestic product of the United Kingdom from 1948 to 2022, January 2024

Following statistics taken from 10,000 Small Businesses UK: Engines of Growth Impact Report, December 2021 and ongoing impact

analysis of the 10,000 Small Businesses UK programme conducted by the Aston Centre for Growth

Year Total # of established

businesses

Total # of businesses achieving

productivity growth

% of Productivity Heroes

2000-01 676k 51.3% - 347k 2.3% (15.6k)

2007-08 825k 54.4% - 449k 4.8% (39.2k)

2010-11 882k 40.7% - 359k 2.7% (23.7k)

2018-19 1.13m 49.2% - 557k 3.3% (37.1k)

2021-22 1.22m 37% - 453k 3% (36.3k)

The UK faces signiﬁcant challenges, with macro-economic headwinds

and stalling growth compounding a long-term productivity problem.

Only 37%

just over 453,000 – of established businesses are achieving productivity

growth – however this can happen in many ways (e.g. cutting headcount

while revenue remains ﬂat)

The UK’s Productivity Puzzle:

Since 2007, average annual productivity growth has been just 0.2% compared with a 3.6% average in the

three decades following World War Two.

This recent sluggishness is in contrast to the years leading up to

the global ﬁnancial crisis, when UK productivity was growing at a faster pace than the US.

With over 5.5 million SMEs in the UK

, small businesses are key to reversing that trend. Of UK SMEs,

1.2 million are established businesses, that are at least three years old and employ at least one person

These businesses contribute over £2 trillion revenue to the economy, employing 9 million people

But many are trapped by stalling productivity:

'Productivity Heroes'

Closer inspection of this group of established businesses uncovers a cohort of 'Productivity Heroes' that

have been identiﬁed through new analysis of ONS data by our leading academic partners at the Enterprise

Research Centre:

or 36,000 of the UK’s 1.2 million established SMEs who are at least three years old, are 'Productivity

Heroes' who are creating jobs but growing revenue even more over a sustained 12-month period

They are a small but mighty coalition. On average, they increase revenues by 196% and headcount by

29% in a 12-month period, equating to £4.9 million in extra revenue and 4 additional jobs per business

on average.

In 2021-22, they collectively contributed more than £268 billion to the UK economy –

a contribution that grew by more than £177 billion combined compared with the previous year. Whilst

this may partially be attributable to a post-pandemic bounce-back eﬀect, it is consistent with a pattern

of within year growth for this small group of ﬁrms going back to 2000.

Productivity Over Time:

In recent decades, the proportion of Productivity Heroes has ﬂuctuated. Since 2007-08 the number of established

small businesses in the UK has grown by 50% from 825,000 to 1.2 million. Yet over the same time period the

number of ‘Productivity Heroes’ has fallen and the number of businesses achieving productive growth has stayed

the same. The table below shows the rate of ‘Productivity Heroes’ at key points since the turn of the millennium:

A New Generation of Growth

Converting one established SME into a ‘Productivity Hero’ could add 4 new jobs and £4.9 million

in revenue on average per business. Recreating an environment similar to the one before the

ﬁnancial crisis could have a profound impact.

Increasing the rate of 'Productivity Heroes' from the current 3% to the 2007/08 rate of 4.8%,

could support 22,000 additional established SMEs to become ‘Productivity Heroes’:

These 22,000 additional ‘Productivity Heroes’ could deliver an additional £106 billion in private

sector revenue (roughly 4.7% of the UK’s annual GDP

) and create an additional 88,000 jobs

That is a huge opportunity that could deliver a new generation of growth, but SMEs need help to

make it happen. That is why this Manifesto is being launched, leveraging the insights of the 10KSB

UK community

This suggests that it’s easier than ever to start a small business in the UK. But it has become harder to sustain productive

growth, and the little progress that has been made since the ﬁnancial crisis appears to have stalled in recent years.

23%

24.3%

22.6%

10.4%

71%

Many 10KSB UK alumni are already ‘Productivity Heroes’ or are close to being one, meaning

they represent the perfect focus group to understand how productive growth can be achieved.

This report collates the solutions that these fast-growth small businesses have asked for.

They are the ‘Productivity Heroes’ of tomorrow, and their voices must be listened to.

Who are the UK’s ‛Productivity Heroes’?

The most common sector for ‘Productivity Heroes’ was ‘Business and Professional Services’

with 40% (14,300 businesses) working in this space. Other common sectors include:

Wholesale & Retail (8,800 businesses) Construction (3,800 businesses)

The areas with the lowest share of Productivity Heroes aligns strongly with the

regions and devolved nations at the heart of recent Levelling Up eﬀorts:

• Northern Ireland – 1.2% (<500 businesses)

• North East – 2.8% (1,000 businesses)

There is a variable presence of ‘Productivity Heroes’ across the UK:

Perhaps unsurprisingly the highest share

is in London (8,200 businesses)

and the South East

(5,200 businesses) respectively

14.4%

• Wales – 3.3% (1,200 businesses)

• Scotland – 5.9% (2,100 businesses)

Compared with similarly fast-growth small businesses,

10KSB UK graduates have a 23% increase in

productivity in excess of what they would have already

achieved without participating in the programme

of alumni are increasing their turnover

and 73% are increasing their headcount

Why SMEs Matter:

The ‘Productivity Heroes’ that

can reignite the UK economy

Think With An SME Lens

• Small businesses are vital to

the UK’s economic prosperity

and future growth – their

perspective must be at the heart

of the political conversation

• Small businesses should

have a leading voice, with

high-level representation

across all areas of policy

Act For The Long-Term

• Provide certainty and stability, with

policy that is set for the long-term

• SMEs are resilient and innovative

– with their adaptability being

most strikingly demonstrated

through the pandemic – but policy

should never stiﬂe their growth

and ambition, only accelerate it

General

1. Curate and publish a ﬁve-year

National Small Business Plan

with binding measurable public

targets, co-authored by a new

Small Business Commission

comprising representatives

from Parliament, industry

bodies and small businesses

2. Host a series of ‘missions’ to

establish why our G7 peers are

better at scaling businesses

than the UK and adopt best

practice. For example, exploring

the success of the Mittelstand in

Germany and the Small Business

Administration in the US

3. Provide a commitment to

long-term, growth-led small

business policy that puts the

requirements of small businesses

ﬁrst and ensures stability

Access to Finance

4. Increase the range of

government-backed and

government-supported ﬁnancing

options speciﬁcally targeted

at small business leaders (e.g.

diﬀerential interest rates, loan

schemes, encouraging UK

pensions schemes to back SMEs)

5. Ensure that any implementation

of a UK sovereign wealth fund

includes a commitment to

including entrepreneurship

as an area for spending

6. Work with the private sector

to ensure the UK remains

an attractive market to

take businesses public

and establish a meaningful

pathway for ambitious small

businesses who aim to do so

7. Invest in a prominent national

campaign to increase SME

leaders’ awareness of the existing

ﬁnancing options they need to

grow, especially for Women and

Ethnic Minority business owners

who are currently under-served

Taxation & Trading

8. Reform business rates and invest

further in the digitalisation of

the system to facilitate more

regular reviews, exploring

diﬀerential rates by sector and

discounts for high performing

businesses and meaningful

property improvements

9. Tackle the ‘late payments’

crisis that is disproportionately

impacting SMEs, with an

independent commissioner

empowered to enact tougher

penalties on those who

miss payment deadlines

Talent & the Workforce

10. Explore embedding

enterprise in the mandatory

secondary curriculum and

place greater emphasis on

general employability skills

11. Work closely with small

businesses to support

international recruitment

and explore the potential for

mutually beneﬁcial visa waivers

12. Work with SMEs when developing

any changes to employee rights

to support talent retention

and economic growth

Infrastructure

13. Outline a clear strategy for digital

growth, including a timely plan

to upgrade the existing network

and expand digital capacity

14. Conduct a small business-ﬁrst

review of the UK’s product

distribution and logistical

infrastructure capacity

15. Explore the introduction of

stricter vendor diversity quotas

for both local and national

government infrastructure

projects to support the growth of

small and diverse-led businesses

Climate Transition

16. View small businesses as a

key partner in helping the UK

meet its net-zero objectives,

setting an ambitious course

and rewarding small businesses

who meet their targets

17. Investigate new ways of

helping SMEs weather the

changing currents of the energy

market, such as including the

establishment of a public-backed

energy generation company

Artiﬁcial Intelligence

18. Help SMEs understand the

risks and opportunities of

AI by oﬀering increased

educational programming,

training and guidance tailored

to small businesses

19. Provide a springboard for growth

through expanded ﬁnancial

incentives that encourage

SMEs to take advantage of AI

International Markets

20 Put SMEs at the heart of

new meaningful trade deals

and eﬀorts to simplify red-

tape with existing partners

21. Invest in greater ampliﬁcation

of the Department for Business

& Trade’s existing support

programming for small

businesses interested in

exporting and ﬁnd new ways

to disseminate information

more eﬀectively

Small Business Owners'

Principles For Government

Focus On What Works

• SMEs believe many elements of the

current policy framework are working

well, but often exist in isolation

• Continue with existing policies that

small businesses say are working,

and build on them to ensure they

are delivered in a connected way

Amplify, Clarify and Educate

• High-quality educational support is

proven to deliver growth in revenue,

jobs, and productivity but many SMEs

struggle to cut through the noise

• Make a concerted eﬀort to raise

awareness of existing support and

expand educational programmes on

key topics, particularly where policy

changes may impact SMEs’ operations

The Policy Asks Of

Small Business Owners:

These "Policy Asks" are based on surveying of the

10KSB UK community and have been formulated

through analysis and discussion, moderated by

Goldman Sachs, with 10KSB UK alumni, academic

partners and third-party professionals in the UK

small business ecosystem, including a roundtable

discussion held on Monday 29th January 2024.

They are a summary of the views expressed by

small businesses surveyed and the "Policy Asks"

do not necessarily represent the institutional

views of Goldman Sachs. Full methodology

relating to the survey can be found on page 24.

Michal Silver,

Christopher Farr Cloth,

London, 10,000 Small

Businesses UK Graduate

Malcolm Little,

Advanced Dynamics,

Bradford, 10,000 Small

Businesses UK Graduate

Key Headlines:

Going For Growth

The UK has over 1.2 million small

businesses that have been operating for

3 years or more. Together they account

for £2.1 trillion in annual revenue and

employ around 9 million people.

These established businesses are the engines of the UK

economy – they drive innovation, productivity, and proﬁt, and

they will be essential to creating a new generation of growth.

To inform this manifesto, over 550 members of the 10KSB UK

alumni were surveyed. These are fast-growth businesses who

have shared their views on the existing small business policy

landscape.

The general outlook is optimistic:

94%

expect their revenue to grow in

the next 3 years

90%

expect their headcount to

grow in the next 3 years

Despite challenges in recent years from changing trading

conditions post-Brexit, the impact of the Covid-19

pandemic and the cost-of-living crisis, the majority (68%)

believe the UK is a good place to run a small business.

However, recent turbulence in the UK

economy and slow productivity growth

has created a number of challenges.

When asked to identify their number

one priority for the next government,

the following themes were the top

ﬁve identiﬁed:

20%

highlighted ‘upskilling the UK

workforce’

19%

said ‘improving access to ﬁnance’

18%

said ‘reforming business rates’

14%

said ‘making it easier for SMEs

to trade internationally’

said ‘improving the UK’s

digital infrastructure’

Whilst the UK’s small businesses

are ambitious and optimistic about

their growth, to succeed they need

support. To solve the productivity

puzzle and be the best place in the

world not only to start but also to grow

a small business, the next government

needs to create an environment

for sustainable growth, informed by

long-term policy commitments.

As part of the research for this report, 10KSB UK SMEs

shared their number one message for the next government:

Curate and publish a ﬁve-year National Small Business Plan

with binding measurable public targets, co-authored by a new

Small Business Commission comprising representatives from

Parliament, industry bodies and small businesses

Host a series of ‘missions’ to establish why our G7 peers are better at

scaling businesses than the UK and adopt best practice. For example:

•. Policies that have driven the success of Mittelstand in Germany,

such as maximising the apprenticeship system, building trust and

collaboration between employers and employees to ensure ﬂexibility

and security, focusing on exports and on growth in rural communities

•. The dedicated Small Business Administration in the US which is

independent of the government but with a seat in Cabinet

Provide a commitment to long-term, growth-led small business policy that

puts the requirements of small businesses ﬁrst and ensures stability

My number one message to the next government would be to

emphasise the need for transformative and long-term business-

friendly reforms that will positively impact the UK's economy,

growth, and international standing. focusing on sustained

investment in areas that can bridge the productivity gap and

enhance the UK's economic position.

Create a long-term vision -

stop short-termism based

on election timelines - this

should be about what's right

for Britain not a politician's

career and brand.

Look beyond start-ups

to scale-ups. Take

inspiration from

Germany's Mittelstand.

Figures provided by the Enterprise Research Centre, January 2024

10,000 Small Businesses UK is a comprehensive programme of business development and leadership

support for small businesses with high growth potential, designed to help them achieve that potential.

Piloted in late 2010 and launched in early 2011, to date, 2,226 entrepreneurs from across the country have

graduated from the programme. The 10,000 Small Businesses UK programme is a partnership between

Goldman Sachs, the Goldman Sachs Foundation and leading UK universities.

Small Business Owners' Key Policy Asks

Quotes From Other Members Of Our 10KSB UK Alumni Community

Rachel Jackson

Rachel Jackson London,

London, 10,000 Small

Businesses UK Graduate

Access to a pipeline of future

talent is a key barrier to

growth for many SMEs.

55%

said they are currently unable

to access the talent they

need for their business

Only12%

believe the education system is

equipping young people for the future

of work and 89% believe enterprise

skills should be embedded within the

core secondary school curriculum

This negative perception may be

linked to misconceptions around the

knowledge the workforce of tomorrow

needs to succeed and a greater focus

on the soft skills that can make young

people more employable. When asked

what is the number one skillset young

people need to be taught in schools:

21%

said ‘General IT user skills

(Word, PowerPoint, Excel)’

19%

said ‘Financial management

& accounting’

19%

said ‘Presentation skills

& public speaking’

Only 5% would prioritise ‘Coding’ and

‘Natural sciences and engineering’

respectively, and just 2% chose

‘Foreign languages'. This view

runs counter to the signiﬁcant

investment and recent campaigns

focused on these topics and

may be a symptom of an evolving

workplace, where technological

advances are eliminating the

need for technical knowledge.

Schooling is just one element of

the skills crisis, with vocational

education, apprenticeships and

lifelong learning all having a key role

to play. For the purpose of this report

we have not sought to replicate

the outstanding research that has

already been published by other

organisations on these topics. But this

does not mean that policy solutions

to incentivise small businesses

to further upskill their existing

employees should be ignored.

Access to international talent

is just as important as the

challenges with the UK pipeline.

While existing mechanisms can

support growth, many feel there

is still more that can be done:

61%

said they believe the existing

Scale-Up Work Visa, could be

useful to the future of their

business in its current form

91%

said they believe the UK should

prioritise mutual visa waivers with the

European Union for sectors impacted

by the restriction of free movement,

such as Hospitality and Retail

In addition to accessing new talent, SMEs have struggled with retention and

management of the existing workforce. Rather than adding to the body of detailed

work analysing the long-term impact of the pandemic on working practices, we asked

small business owners what forward looking solutions they would favour

would in principle support the introduction of an employee bill of rights.

When asked their views of what could or should be included:

83%

agreed with ‘the statutory

right to bereavement leave’

77%

agreed with banning ‘ﬁre

and rehire’ practices

65%

agreed with increasing

the minimum/living wage

to align with inﬂation

60%

agreed with ‘the right to ‘switch

oﬀ’ from work at certain times’

49%

agree with banning

zero-hours contracts

48%

agreed with ‘the right

to ﬂexible working’

Talent & The Workforce:

Combatting The Skills Crisis

61%

Explore embedding enterprise in the mandatory secondary curriculum

and place greater emphasis on general employability skills

Work closely with small businesses to support international recruitment

and explore the potential for mutually beneﬁcial visa waivers

Work with SMEs when developing any changes to employee

rights to support talent retention and economic growth

Small Business Owners' Key Policy Asks

Talent is a key driver for productivity and growth. As such,

supporting the existing workforce and developing the workforce

of tomorrow are essential priorities for small business owners.

Evolve the education

sector to one that is ﬁt

for purpose. Teach more

subjects that are relevant

to 2023 and ﬁx the issue

of poor communication

and soft skills from

current students leaving

education and entering

the workforce students

leaving education and

entering the workforce.

In terms of the skills

required in education,

I think the most important

one; helping people to

critically decode and

sort digital information.

It's infuriating that it's

such a struggle to ﬁnd

hardworking full-time

individuals who want to

work in-house. We have

tried to balance it for

everyone and my team

seem happy but it's the

future recruitment that is

a struggle as people just

aren't applying for the

roles in the numbers they

used to, and everything

has a caveat.

Quotes From Other

Members Of Our 10KSB

UK Alumni Community

Kathy Caton MBE,

Brighton Gin, Brighton,

10,000 Small Businesses

UK Graduate

Small Business Owners' Key Policy Asks

When thinking about potential policy solutions there

are a range of ideas respondents would be supportive of:

support the establishment of

a new equivalent of the Start-

Up loan scheme to support the

continuing expansion of established

fast-growth businesses

support preferential Entrepreneurs

interest rates for fast-growth

small business owners

support the continuation of the

Seed Enterprise Investment

Scheme and Enterprise

Investment Scheme

58%

37%

94%

93%

87%

36%

Access To Finance:

Fuelling The Engines Of Growth

Easy access to ﬁnancing, regardless of gender, ethnicity,

sector, or location is essential for small business growth

and sustained UK prosperity.

Yet a signiﬁcant minority of fast-growth small businesses

do not see the UK as the best place to secure investment.

When asked ‘when accessing external

ﬁnance in the future will you stay in the

UK or are you more likely to move to

other markets (e.g. the US)?’ 42% said

they would look to stay in the UK, with

20% sure they would look abroad

More than a third (37%) were unable to access the

ﬁnance they need for their business in the UK

While only one in ﬁve would look abroad, the

ﬁgures suggest that 58% are not actively seeking

investment in the UK. Further analysis is needed

to identify what barriers are preventing these

businesses exploring domestic ﬁnancing options

There were meaningful variances in responses to

this question by demographic, with women and

ethnically diverse businesses less likely to have

been able to access the ﬁnance they need

Ethnically diverse fast-growth small business owners are

much more likely to look abroad (36% compared with the

average of 20%) – reﬂecting the higher barriers that they

face in accessing the ﬁnance they need in the UK to date

We should also consider that these are the ﬁgures of

small businesses who are deﬁned as ‘fast-growth’ and

we would expect that the barriers to ﬁnance for the

wider small business population are even higher

Thinking of the long-term, many fast-growth small business

owners want to build on this appetite for ﬁnance and take their

business public, but are divided on where to do so:

would consider taking their business public. Of these,

44% think the UK remains an attractive market for

potentially taking their business public at some

point in the future, with 26% saying the UK is

not attractive and 31% being unsure, suggesting

strong ambition if given the correct support

42% UK

Abroad

There is also appetite for private

sector reforms, building on the

2023 Mansion House Accords:

79% said that as part of broader

reforms, they think UK pension

funds should commit to investing a

certain percentage of their

investments in fast-growth, UK

based businesses

When it comes to national

infrastructure to support spending

and investment, 68% support the

establishment of a UK sovereign

wealth fund with only 2% being

actively opposed

However, 73% believe it is

essential that any future UK

sovereign wealth fund is

legally committed to including

entrepreneurship as an area

for spending

Small businesses are over-taxed, and it is also relatively dicult to raise

funds in the UK compared to the US. It is a hostile environment for growth.

Quotes From Other Members Of Our 10KSB UK Alumni Community

Increase the range of government-backed and government-supported

ﬁnancing options speciﬁcally targeted at small business leaders, including:

• The continuation of existing enterprise investment schemes

• Introduction of a greater range of SME focused funding products

such as diﬀerential interest rates and loan schemes for fast-growth

small businesses, using the appropriate ﬁnancial structures

• Further reform of UK pension schemes by encouraging them to

place a greater emphasis on supporting UK small businesses

• Take lessons from international partners, for example, France or

Italy, the only two of the top 10 markets in Europe where VCs

closed more funding rounds in 2023 than in previous years

Ensure that any implementation of a UK sovereign wealth fund includes

a commitment to including entrepreneurship as an area for spending

Work with the private sector to ensure the UK remains an attractive

market to take businesses public and establish a meaningful

pathway for ambitious small businesses who aim to do so

Invest in a prominent national campaign to increase SME leaders’ awareness

of the existing ﬁnancing options they need to grow, especially for Women

and Ethnic Minority business owners who are currently under-served

Ada Jabaru,

Nistad Limited.

London, 10,000 Small

Businesses Graduate

Taxation & Trading:

Getting Britain Growing

Taxation and supporting small businesses ability to

trade are instrumental in developing an ecosystem that

allows fast-growth small business owners to thrive.

Small businesses view ‘late payments’ as not only a symptom of the

UK’s productivity challenge, but a meaningful barrier to growth:

41%

say the late payment crisis

has impacted their growth

89%

would be supportive of tougher

legislation for big businesses on

‘late payments’, with companies

who do not pay in time being

subject to ﬁnancial penalties

Among those who want to see legislative action against big businesses,

84% would still be supportive if legislation applied to businesses of all sizes,

potentially including their own.

Eﬀective taxation and barriers to trading have long been a point of discussion

for small business owners focused on growth. Business rates are particularly

contentious: 18% say that ‘Business Rates Reform’ is their top priority for the

next government:

53%

When asked about broader reforms of the business rates system, there

are a range of policy solutions small businesses would be supportive of:

93%

support a business rates discount for

meaningful property improvements

78%

support the concept of diﬀerential

business rates depending on the

business sector (e.g. hospitality and retail)

72%

support discounted business

rates for growing SMEs with

increased productivity potential

72%

support a permanent cap

on the headline rate

72%

a permanent, UK-wide business

rates exemption for the ﬁrst

24 months in a new property

69%

agree with stepped business

rates aligned to reported

business turnover

Reform business rates and invest further in the digitalisation of the system to

facilitate more regular reviews, exploring diﬀerential rates by sector and discounts

for high performing businesses and meaningful property improvements

Tackle the ‘late payments’ crisis that is disproportionately impacting

SMEs, with an independent commissioner empowered to enact

tougher penalties on those who miss payment deadlines

believe business rates for property should be evaluated

more often than the current once every 3 years. Of those

who believe there should be more frequent reviews

45% believe they should be reviewed annually

with 55% saying every 2 years

We need to embrace failure, innovation, and enterprise. This is done

very well through the EIS [Enterprise Investment Scheme] and SEIS

[Seed Enterprise investment Scheme], but Entrepreneurs' Relief

should be widened. At present all incentives, both taxation and

possible income is set up to reward salaried work for large institutions.

Small Business Owners' Key Policy Asks

Quotes From Other Members Of Our 10KSB UK Alumni Community

Ben Amanna,

BoxRaw, Coventry,

10,000 Small

Businesses Graduate

65%

They key challenges they

did highlight included:

saying they are held back by a

‘lack of understanding/experience

of international markets’

saying they struggled with ‘regulatory

red-tape with existing trade partners’

saying they faced issues

due to a ‘lack of meaningful

bilateral trade agreements with

potential trading partners’

claimed they currently don’t

face any challenges/barriers.

20%

10%

Please help us to trade

internationally more – the one

advantage of Brexit is that it

should make British businesses

more willing to actively export but

we need help learning the ropes.

Ease visas please so

we can hire people

to do work, so that

the economy can

move again from the

bottom up.

Put SMEs at the heart of new meaningful trade deals and eﬀorts to simplify

red-tape with existing partners

Invest in greater ampliﬁcation of the Department for Business & Trade’s existing

support programming for small businesses interest in exporting and ﬁnd new ways

to disseminate information more eﬀectively

Small Business Owners' Key Policy Asks

Quotes From Other Members Of Our 10KSB UK Alumni Community

15%

North America

14%

Middle East

Other

Asia

17%

International Markets:

The UK’s role in the world

Expansion to international markets, increased trade and access to global talent are vital

ingredients for the UK's future growth, but small businesses need support to succeed.

Through Brexit, the pandemic and international conﬂicts, the last ﬁve years have featured

signiﬁcant uncertainty, impacting Britain’s ability to compete internationally:

Two-thirds (65%) said they believe Britain still has a strong international brand

There is an opportunity to capitalise on this conﬁdence to project to

the world why the UK is an attractive place to invest and do business with.

When asked about the barriers to international trade, a mere 21% described

it as not applicable to their business – illustrating a clear appetite for growth

in markets outside the UK.

When asked where they believe the UK should be

prioritising trade relationships – 56% would prioritise

the EU, nearly four times as many as the second

most popular option of North America (15%)

Prioritise the EU

56%

Lauren York,

UK Locations, Leeds,

10,000 Small Businesses

UK Graduate

Infrastructure:

Curating An Environment For Growth

National infrastructure is essential to creating the conditions for

growth and supporting the innovation of small businesses.

Perhaps most importantly from a growth perspective,

small businesses believe they have a role to play in

supporting future government infrastructure projects:

think that local and national government should be

liable to legally binding vendor quotas, ensuring

they utilise SMEs and diverse-led businesses

When asked at what rate these quotas should be set:

believe the quota should be set at 20%

believe the quota should be set at 30%

When asked about the state of national

infrastructure, small businesses are focused on

a digital future – putting it on an equal footing

when asked whether the next government should

prioritise investment in digital or physical.

When asked to select the one key infrastructure

challenge impacting their business in the next

3 years, two clear priorities stood out:

selected digital capacity and the standard

of the UK’s network as their top priority

said distribution channels and logistics

Further to this, 13% identiﬁed housing and

social welfare capacity as the most important

infrastructure challenge, 12% said ‘Childcare

provision’, and ‘Planning reform respectively’

Despite recent media attention , ‘transport and rail’

(10%) and ‘energy and grid capacity’ (7%) ranked the

least important, suggesting that although they may be

important to the broader public, these policy areas

may be less relevant to driving small business growth.

84%

34%

61%

26%

21%

Outline a clear strategy for digital growth, including a timely

plan to upgrade the existing network and expand digital capacity

Conduct a small business-ﬁrst review of the UK’s product

distribution and logistical infrastructure capacity

Explore the introduction of stricter vendor diversity quotas for

both local and national government infrastructure projects to

support the growth of small and diverse-led businesses

Small Business Owners' Key Policy Asks

10%

Transport & Rail

Energy & Grid

Support SMEs with far greater access to low-cost funding and

stimulate the economy by supporting infrastructure projects.

Stop allowing local governments to form buying groups which

bypass local SMEs in favour of buying from large companies.

Quotes From Other Members Of Our 10KSB UK Alumni Community

Lawrie Abercrombie,

Arcanum Information

Security, Camarthenshire,

10,000 Small Businesses

UK Graduate

It is clear that small businesses are focused on the green

agenda, however they need support to play their part fully:

believe there should be greater ﬁnancial incentives to

businesses for producing and using clean energy

However, despite their ambition, they still face

challenges in the cost of energy, with

saying that this has restricted their growth in the

past three years.

89%

70%

35%

75%

Climate Transition:

Sustaining Business Sustainably

But they also believe there is an

opportunity for the UK to respond:

think the next government should establish and invest

in a new publicly owned energy generation company

These ﬁndings demonstrate that fast-growth small

business owners think the UK needs to act quickly and

embrace the opportunities climate transition presents:

don’t think the UK is being ambitious enough in

encouraging the transition to a net-zero economy

View small businesses as a key partner in helping the UK

meet its net-zero objectives, setting an ambitious course

and rewarding small businesses who meet their targets

Investigate new ways of helping SMEs weather the changing

currents of the energy market, such as the establishment

of a public-backed energy generation company

Small Business Owners' Key Policy Asks

Being green should be a legal

requirement and it should be

incentivised.

Take the race to net zero seriously.

It presents huge opportunities, but

we also need to plan and put the

right measures in place to protect

businesses and society from the

fallout from the climate emergency.

Many fast-growth UK small business owners see the climate

transition not just as a challenge to be navigated but as a

vital way they can grow their business in the long-term.

Quotes From Other Members Of

Our 10KSB UK Alumni Community

Ricky Kothari,

Sticksology, London,

10,000 Small Businesses

UK Graduate'

Artiﬁcial Intelligence:

The New Growth Frontier

The Artiﬁcial Intelligence revolution is already upon

us and represents both a challenge and a key

growth opportunity for many UK SMEs.

From speaking to fast-growth small businesses, it is apparent that AI is not a debate

for the future – it is already having a profound impact on the way they work:

When asked about the main barrier they face when utilising

AI, only 7% said it was not relevant to their business,

reinforcing just how critical AI can be to future growth

Importantly, 60% identiﬁed the main challenge as a ‘lack of understanding’ around AI,

demonstrating a greater need for education, guidance, and support. On that theme:

79%

believe there should be new ﬁnancial

incentives for small businesses to

‘innovate new AI technology/products’

75%

of small business owners believe there

should be new ﬁnancial incentives for small

businesses to ‘adopt existing AI technology’

AI is available for us to do a great deal more with the workforce we

have but training in digital skills is still lacking and decided by

people who are not on the ground. Do more listening to SMEs

rather than big business - they have more money, but we do more.

Support us and we will aﬀect greater change and prosperity.

46%

currently leverage AI to optimise the

performance of their business

80%

are either already speciﬁcally using generative

AI tools such as Chat GPT, or plan to

start doing so in the next 12 months

In the last 3 years, 11% have hired new specialist employees to take advantage of the opportunities

AI presents, while 3% have laid oﬀ employees whose jobs have now been replaced

Help SMEs understand the risks and opportunities of

AI by oﬀering increased educational programming,

training and guidance tailored to small businesses

Provide a springboard for growth through expanded ﬁnancial

incentives that encourage SMEs to take advantage of AI

Small Business Owners' Key Policy Asks

Quotes From Other Members Of Our 10KSB UK Alumni Community

Charmaine Dugdale,

1-2-1 Mentors Ltd,

Exeter, 10,000 Small

Businesses UK Graduate

Methodology & Acknowledgements

The intention of this report is to amplify the voice

of small businesses and give them a platform to

share their insights on the challenges they are

facing. The opinions and views expressed in this

report do not necessarily reﬂect the institutional

views of Goldman Sachs or its aliates. Any

logo used in this report is the property of the

company to which it relates, is used here strictly for

informational and identiﬁcation purposes only and

is not used to imply any ownership or license rights

between any such company and Goldman Sachs.

The content of this report does not constitute a

recommendation from any Goldman Sachs entity

to the recipient and is provided for informational

purposes only. Goldman Sachs is not providing any

ﬁnancial, economic, legal, investment, accounting,

or tax advice through this report or to its recipient.

Certain information contained in this report

constitutes “forward-looking statements,” and there

is no guarantee that these results will be achieved.

Goldman Sachs has no obligation to provide

updates or changes to the information in this report.

Neither Goldman Sachs nor any of its aliates

makes any representation or warranty, express or

implied, as to the accuracy or completeness of

the statements or any information contained in

this report and any liability therefore (including in

respect of direct, indirect, or consequential loss

or damage) is expressly disclaimed. The report

was produced by Goldman Sachs 10,000 Small

Businesses in partnership with: the Aston Centre for

Growth; Saïd Business School, University of Oxford;

Seven Hills Communications Ltd. The report is not

a product of Goldman Sachs Investment Research.

There are two main data sources utilised in this

report. The ﬁrst is an online survey which was

conducted between 15th November and 11th

December 2023 and was sent to 1,848 members

of the 10,000 Small Businesses UK alumni

community. In total, 566 small business owners,

all of whom were graduates of the 10,000 Small

Businesses UK programme participated in the

survey, representing a response rate of 30.6%.

The survey was administered by Saïd Business

School, University of Oxford on behalf of the

10,000 Small Businesses UK programme.

Secondly, statistical analysis and external data

relating to the broader state of the UK economy

and productivity in particular were provided by

Professor Mark Hart of the Aston Centre for

Growth and Enterprise Research Centre, and Dr

Karen Bonner of the Economic Policy Centre,

Ulster University. Both were assisted by Dr Neha

Prashar of the Enterprise Research Centre. The

statistical data used here are from the Oce

of National Statistics (ONS) and are Crown

the controller of His Majesty's Stationery Oce

(HMSO) and Queen’s Printer for Scotland. The

use of the ONS statistical data in this work does

not imply the endorsement of the ONS in relation

to the interpretation or analysis of the statistical

data. The analysis upon which this report is based

uses research datasets, which may not exactly

reproduce National Statistics aggregates.

The analysis undertaken in this report and the

‘Policy Asks’ from small businesses that it contains

are based on the above two data sources and

have been formulated through analysis and

discussion, moderated by Goldman Sachs

leaders, with: the 10KSB UK alumni community;

academic partners; and third-party professionals

in the UK small business ecosystem, through a

series of virtual and in-person conversations

and roundtable discussions in 2023 and 2024.

While 10,000 Small Businesses UK graduates

represent a useful and valid sample of fast-growth

SMEs from across the UK, we do not presume

that 10,000 Small Businesses UK graduates

will speak to the experience of the UK small

business community at large. The programme

is speciﬁcally geared towards ambitious SME

leaders with a proven track-record of growth

over the last three years both in terms of revenue

and proﬁtability. In addition, as graduates of the

10,000 Small Businesses programme, all alumni

have had unique access to a comprehensive

business education programme that has a

proven transformational impact on participants.

10,000 Small Businesses UK is a comprehensive

programme of business development and

leadership support for small businesses with high

growth potential, designed to help them achieve

that potential. Piloted in late 2010 and launched in

early 2011, to date, 2,226 entrepreneurs from across

the country have graduated from the programme.

The 10,000 Small Businesses UK programme is a

partnership between Goldman Sachs, the Goldman

Sachs Foundation and leading UK universities.

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