Increase in young, female and black and Asian entrepreneurs revealed
A landmark study* of more than two million UK businesses from GoDaddy Inc. [NYSE: GDDY], the company that empowers everyday entrepreneurs, reveals how the make-up of British microbusiness owners has changed since the start of the pandemic and their importance to local economics.
A new breed of entrepreneur emerges
The release of Venture Forward data saw GoDaddy partner with, Professor George Saridakis, Professor of Entrepreneurship and Small Business at Kent Business School, to analyse the impact of 2.3 million businesses on their communities and the country. The results show that the percentage of those start-up owners aged under 35 has more than doubled since March 2020, rising from 16.4% to 34%. Among this group, the proportion aged 18-24 has soared from just 1.7% pre-pandemic, to 8.6% in the two years after the Covid-19 outbreak.
Encouragingly, the demographics of entrepreneurs have also started to become more diverse. The percentage of microbusiness owners who are female has risen from 32% pre-March 2020 to 39.8% in the months since, while the proportion from minority communities has risen from 13.2% to 15.1%.
The representation of business owners from minority ethnic groups is also gradually increasing. Black founders account for 5.4% of pre-pandemic businesses and 6.6% among those created after March 2020. The corresponding figures for Asian entrepreneurs are 10.1% pre-pandemic and 11.9% after it began.
GoDaddy’s research highlights that many of these microbusinesses may have been born out of economic necessity during a turbulent time for people’s jobs and earnings. Prior to the pandemic the number of microbusiness owners who were unemployed before starting their business was 5.7%, while those in part-time work was 7.9%. These figures have risen to 7.3% and 11.7% respectively since March 2020.
Cleo Morris, 28, from Birmingham, set up Mission Diverse in October 2020 to connect minority and under-represented communities with companies through entrepreneurship and employability training, education and mentoring. Mission Diverse delivers diversity and inclusion training to corporates, using the funds generated to run free eight week programmes which cover every step of incorporating a business. So far it has trained 63 entrepreneurs, with the aim of training 1,000 over the next five years.
Cleo has seen the city’s enterprise community thrive over the past two years, and says: “Around 70% of our sign-ups are women, with the majority coming from black backgrounds. There is an incredible entrepreneurial spirit in so many of these communities, so it’s encouraging to see that the microbusiness owners across the country are getting younger and more diverse. A number of our start-up entrepreneurs have already gone on to generate sales and secure funding for their businesses, showing that with the right training, resources, mentoring and motivation anyone is capable of starting their own business. We want to train 1,000 entrepreneurs from marginalised backgrounds over the next five years, and with GoDaddy’s support we have all the right tools to make that happen”.
The enterprise landscape still dominated by a North-South divide
Despite a shift in the demographics of those setting up microbusinesses, the Venture Forward dataset shows that the landscape is still dominated by a North-South divide. The top three regions where entrepreneurs live are the same before and after March 2020: London (21.7% / 22.6%), the South East (18.5% / 17.0%) and the South West (10.2% / 9.8%).
Even more compellingly, by mapping the concentration of microbusiness owners against local population sizes, GoDaddy has been able to produce a ‘venture density’ ranking for every constituency in Great Britain. The top 14 entries are all in London, led by the Cities of London and Westminster with 13.33 microbusinesses for every 100 people, Hackney South and Shoreditch in second place with 5.41, and Islington South and Finsbury in third with 4.99.
In fact, of the 50 constituencies with the highest venture densities, only six are not in London, South East or South West. These are: Manchester Central (1.91), Glasgow Central (1.80), Hazel Grove (1.75), Solihull (1.71), Edinburgh North and Leith (1.67) and Birmingham Ladywood (1.59).
The three constituencies with the lowest venture densities are Merthyr Tydfil and Rhymney in Wales (0.20), Workington in Cumbria (0.21) and Washington and Sunderland West (0.23).
Microbusinesses have the power to help level-up disadvantaged communities
Following the launch of the Venture Forward dataset, GoDaddy has committed to sharing its research findings with national and regional policymakers. It aims to improve knowledge of the microbusiness landscape, and to help create opportunities for microbusiness owners across the country to flourish and their communities to become more prosperous.
Ben Law, head of GoDaddy UK, said: “There are 5.3 million microbusinesses in the UK but very few studies focus specifically on companies with under 10 employees. As a result, microbusinesses are under-researched, misunderstood and under-served.
“With the right policy infrastructures in place, microbusinesses have the power to contribute to levelling-up disadvantaged areas. Our research shows that over half of all microbusinesses turn over more than £25,000 a year and three quarters employ at least one other person. Put simply, the more microbusinesses there are in a community, the better the job prospects and finances of the people that live there.
“At GoDaddy, we empower everyday entrepreneurs and it’s our mission to help create opportunities for anyone to succeed. After all, microbusinesses are the engine of the British economy. When they thrive, we all do.”