Small Business Survey Scotland: 2021

Business Demographics

Age

In 2021, 10 per cent of SME employers in Scotland first started trading 0 to 5 years previously (i.e. between 2016 and 2021), 19 per cent started trading 6 to 10 years previously, 27 per cent 11 to 20 years previously, and 43 per cent more than 20 years previously.

Legal status

Of SME employers surveyed, 54 per cent were private limited companies, 19 per cent were sole proprietors, and 11 per cent were partnerships and 3 per cent were private companies limited by guarantee (CLGs).

Charity status

Eight per cent of SME employers in Scotland stated that they were registered as charities, significantly higher than the figure in the UK as a whole (five per cent).

Urban/rural location

In 2021, 66 per cent of SME employers were located within an urban area, while 34 per cent were based within a rural area. Medium-sized firms were more likely than average to be located in an urban area (78 per cent). Urban/rural locations are based on the Scottish Government Urban Rural Classification 2020.  

Home-based businesses

In 2021, 28 per cent of SME employers in Scotland did not have separate business premises to their home address, up seven percentage points compared to 2020 (21 per cent) and broadly similar to the proportion in the UK as a whole (29 per cent).

Small (10 per cent) and medium-sized (three per cent) firms were less likely than average to be home-based.

Home-based businesses were more common in the Primary Industries (A, B, D, E, at 66 per cent) and Administrative and Support Service Sectors (N, at 49 per cent) and less common in the Transport/Retail/Distribution (G, H, I at 23 per cent) and Manufacturing sectors (C, at one per cent).

Family-owned businesses
In 2021, 80 per cent of SME employers surveyed in Scotland were family-owned, broadly the same as 2020 (81 per cent) and broadly similar to the figure in the UK as a whole (80 per cent). Family-owned businesses are defined as majority owned by members of the same family.

Small (69 per cent) and medium-sized businesses (63 per cent) were less likely than average to be family-owned.

Family-owned businesses were more prevalent in the Construction (F, at 89 per cent) and Administration/Support Service sectors (N, at 89 per cent), and less prevalent in the Other Services sector (39 per cent).

Women-led businesses

Women-led businesses are defined as controlled by a single woman or having a management team of which a majority were women.

In 2021, 23 per cent of SME employers in Scotland were women-led.  This is higher than 2020, with statistical significance (17 per cent) and higher than the proportion in the UK as a whole (19 per cent). Medium-sized businesses (14 per cent) were less likely than average to be women-led.

A further 24 per cent of SME employers in Scotland were ‘equally-led’ (24 per cent in the UK as a whole), with an equal number of men and women in the management team. This proportion was broadly in line with the previous year. A further 9 per cent had a minority of women in the management team and 40 per cent were entirely male-led (both broadly in line with the UK as a whole at 10 per cent and 44 per cent respectively).

Minority Ethnic Group (MEG)-led businesses

Minority Ethnic Group (MEG)-led businesses are defined as having a person from an ethnic minority in sole control of the business or having a management team with at least half of its members from an ethnic minority.

Four per cent of SME employers in Scotland were MEG-led in 2021, slightly higher than the prior year (two per cent). The proportion in Scotland in 2021 was found to be statistically significantly lower than that in the UK as a whole, at six per cent.