In collaboration with Smart Data Foundry and The Centre for Economics and Business Research (Cebr), the latest iteration of the Sage Small Business Tracker has been launched (see here for the previous version).
The Tracker continues to analyse anonymised Sage Accounting and Payroll data of over 130,000 UK Small and Mid-sized Businesses (SMBs) and looks at how they are performing in real terms in the current economic climate. The anonymised data set includes SMBs from all regions across the UK, including Northern Ireland, Scotland, and Wales with annual revenue of between £0 – £200,000 +.
The most recent report shows that that small businesses are gaining strength, with profits rising as revenues increase and costs stall. Average small business profits grew by 9.5% in Q2 2024 compared to the previous year. Revenues also increased, while real overhead costs remained unchanged in the year leading up to Q2, the first time since Q4 2022 that overheads didn’t grow. This positive trend in revenue growth and cost management highlights the continued resilience of small businesses.
Regionally, businesses in the West Midlands led profit growth with a 15.1% increase, while Scotland, the North West, and Yorkshire and the Humber also saw strong gains. Other regions, particularly in the south, experienced more moderate growth, influenced by their specific sector strengths.
Derk Bleeker, Chief Commercial Officer at Sage, said "This quarter’s tracker showcases the robust financial performance of small businesses in the UK. With profits surging by 9.5% annually—the fastest growth since Q1 2022—alongside a 4.4% increase in revenues, it's clear that small businesses are not only adapting but thriving. These achievements highlight their ability to innovate, manage costs effectively, and drive economic recovery, solidifying their crucial role in the broader UK economy."
The report also shows that, despite financial gains, productivity for the average small business fell by 1.8% over the past year. This drop is mainly because the number of employees has grown faster than revenues. On average, small businesses had 5.6 employees in 2024, up from 4.3 in 2019.
Q2 2024 – top findings
Download the report for the full analysis.
