The Most Popular Industry Sectors For Successful Startup Businesses

A new report, analysing the latest data from the Office for National Statistics (ONS), which focuses the number of micro, small and medium-sized businesses established between 2007 and 2017, shows which SME sectors such as Business administration and support services are the most and least successful for start-up businesses to launch.

The UK Domain, who created this report, evaluated statistics across more than 2.6m micro, small and medium-sized businesses that exist within 18 core industries, and examined how likely these businesses would thrive over certain periods of time, up to 10 years and over.

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The key findings from the data have shown:

With a total number of 478,070 businesses launching between the years of 2007 and 2017, companies in the professional, scientific and technical sector has received the most success.

Those sectors following closely behind were:

  • The Construction sector with 319,555 businesses.
  • Business administration and support services with a total of 227,120.
  • Communication businesses standing at 216,640.

On the other hand, falling at the bottom of the table with a total of 6,780 organisations were those operating in the public administration and defence sectors. Sectors following suit were:

  • Mining quarrying and utilities sector with a total of 13,470.
  • Education sector with a total of 47,055.
  • Financial and insurance sector with 55,350 businesses in operation.

Micro businesses (one to nine employees): Business administration and support services rank 1st

The industry with the greatest number of micro businesses are found within the professional, scientific and technical sector. 451,740 micro businesses are currently in operation, having been set up in the past decade. Of those businesses, 117,110 have successfully stood the test of time and surviving 10 years or more.

The next highest total in the micro category was construction at 301,065 of existing businesses, 113,500 of which are 10 years or older, followed by sectors such as:

  • Business administration and support services with a total of 206,450.
  • Businesses and information and communication came in with 205,580.
  • Retail saw modest success roughly in the middle of the table with 177,075 businesses.

Unfortunately, the public administration and defense sector took bottom position of all industries across small businesses, with a grand total of 6,285 micro businesses having formed over the past decade.

Small businesses (10 to 49 employees)

business administration and support services

The sectors with the highest number of small businesses were:

  • Accommodation and food services with a 32,670 total.
  • Health with a total of 27,125 businesses.
  • Production totals at 24,005 businesses.
  • Professional, scientific and technical has 22,785.
  • Retail totals at 17,165.
  • Business administration and support services at 16,730.
  • Construction at 16, 575.
  • Wholesale 15,670.

business administration and support services

The industry sectors operating as small businesses that are also, most likely to make it to the 10 year or over threshold include:

  • Health at 20,203.
  • Production at 18,480.
  • Accommodation and food services at 14,880.

A total of 231,715 small businesses currently operating in the UK, 152,890 of which achieved survival for 10 years or more.

Medium-sized businesses: Business administration and support services among most popular (50 to 249 employees)

Successful Startup Businesses Business administration

Production takes the lead here when it comes to medium-sized businesses, with a grand total of 6,395 of enterprises.

Other medium-sized business models enjoying success are:

  • Health 5,135.
  • Education 4,165.
  • Business administration and support services 3,940.
  • Professional, scientific and technical 3,545.

On the other hand, the medium sized businesses which appeared to be lagging, included:

  • Agriculture, forestry and fishing with 410.
  • Property with 585.
  • Motor trades with 765.

Successful Startup Businesses Business administration

Finance and insurance totals 920 and are outdone by sectors such as:

  • Accommodation and food services.
  • Wholesale.
  • Construction.
  • Retail.
  • Transport and storage.

There are currently 40,530 medium-sized businesses and more than one-quarter of those, (32,090) are 10 years old and more.

Most Popular Sectors for New Companies

Successful Startup Businesses Business administration

And those that are the least popular

To conclude, the industry which has the highest total of startups across all micro, small and medium-sized businesses, is the professional, scientific and technical sector with a total of 147,730 businesses in operation. As a matter of fact, in 2017, this sector accounted for 17.9 per cent of all registered businesses in the UK.

Other successful industries in operation:

  • The professional, scientific and technical sector also had the largest growth in numbers between 2016 and 2017, an increase of 20,000 businesses.
  • Construction 319,555.
  • Business administration and support services with 227,120.
  • Information and communication 216,640.

With this considered, it seems that the professional, scientific and technical domain appears extremely promising for start-ups. And so, for anyone wishing to venture into the launch of a micro business, the above three sectors appear to be gleaming prospects. Additionally, the accommodation and food services, health and professional, scientific and technical industries also, hold great opportunities for success. And finally, if you are hoping to create a medium-sized business, consider the production, education, health, business administration and support services and professional, scientific and technical sectors, but don’t forget to always do your research.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver