Insights into the health of Small Business

UK | Reporting period: October 01, 2017 - October 31, 2018 Published: December 7, 2018 Next publish: January 10, 2019

Cash flow

55.2%

of UK small businesses were cash flow positive in October 2018

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of UK small businesses were cash flow positive in October 2018
4.06p.p.
Month on month
3.50p.p.
Year on year

Cash flow

Percent of UK small businesses that are cash flow positive

Over the past year, on average 49.7 per cent of UK small businesses are cash flow positive in any given month, with incomings and outgoing highly variable at different times of the year.

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Getting paid

39.8

average number of days for a UK small business invoice to be paid in October 2018 (30-day term)

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average number of days for a UK small business invoice to be paid in October 2018 (30-day term)
0.66%
Month on month
0.25%
Year on year

Getting paid

Average number of days for a UK small business invoice to be paid (30-day term)

The average delay for these payments over a year was 40 days, with the worst months for late payments typically falling in the first quarter of the year.

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Hiring people

-0.4%

change in the number of UK small business employees from September 2018 to October 2018

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change in the number of UK small business employees from September 2018 to October 2018
0.52p.p.
Year on year

Hiring people

Percentage change in the number of UK small business employees

March was 2017’s highest employment growth month at 2.88 per cent - coinciding with March being a relatively high-cash flow month - while the worst months for employment growth are October to December.

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Trading overseas

8.0%

change in the total sterling value of imports and exports for UK small businesses from September 2018 to October 2018

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change in the total sterling value of imports and exports for UK small businesses from September 2018 to October 2018
-0.85p.p.
Year on year

Trading overseas

Percentage movement in the total sterling value of imports vs. exports

Leading up to the Brexit referendum in June 2016, our data revealed decreases in import growth rates, with the year-on-year (YOY) growth rate in April 2016 hitting a high of 30.58%.

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Cloud adoption

47.0%

growth in UK subscribers on Xero in the year through 30 September 2018

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growth in UK subscribers on Xero in the year through 30 September 2018

Cloud adoption

A breakdown of the top 5 UK industries adopting Xero

Professional Scientific and Technical Services, and Construction industries adopted Xero more than any other sector in the year through 30 September 2018.

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UK | Reporting period: October 01, 2017 - October 31, 2018 Published: December 7, 2018 Next publish: January 10, 2019

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Creating a more responsible payment culture

Challenging the late payment culture

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Challenging the late payment culture

Challenging the late payment culture

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Tackling the UK’s productivity puzzle

Where are we to date on the UK’s productivity puzzle?

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How to avoid the summer slump

Summer brings a welcome break for most Brits, but less so for small business owners. Typically considered a slower month for many businesses, the summer sunshine can put extra pressure on both cash flow and staff turnout.

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What small businesses can learn from the summer of sport

Sporting events like Wimbledon create buzz on a national, regional, local and international level. With an innovative enough approach, any kind of business can capitalise on this excitement regardless of the outcome.

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Boosting business productivity: how can UK SMEs reach their potential?

SMEs are the backbone of the UK economy. They employ nearly two thirds of all people in the UK and contribute more than half of private sector revenue.

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We need a cultural change to tackle late payments

Xero Small Business Insights provides a monthly snapshot of the UK’s small business sector. Taking anonymised, aggregated data, it provides insights into four key areas of small business health: cash flow, getting paid, hiring people and trading overseas.

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A closer look at cash flow

  • Cash flow

As the venture capitalist Fred Adler once said: “Happiness is a positive cash flow.” Yes, positive cash flow keeps small businesses running, while negative cash flow can keep them up at night. A business with more money going out than coming in often isn’t long for this world.

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How hiring happens

  • Hiring people

To gain insight into UK employment, we looked at anonymised, aggregated data drawn from hundreds and thousands of Xero subscribers in the UK. We were then able to measure the number of people on the payroll at each of these companies, and how that number changed from month to month.

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International trading

  • Trading overseas

The UK’s history of exports is long and illustrious, involving a variety of goods such as steel, textiles and ships. In fact, Britain was once the leading exporter of goods across the world. While this is no longer the case, the UK still has a big part to play in global trading.