While small businesses may not generate as much income or employ as many people as large companies and organisations, they often form the backbone of the local economy. They fill gaps that big business cannot operate within or are not interested in, and can also respond to limited or niche markets (for example local window cleaners or designer jewellery makers). Much of the small business in the Conwy County Borough and Denbighshire area is concentrated in the agricultural, hospitality and retail sectors, which are key employers in our rural and tourism based economies.
Small businesses are also more likely to recycle their income within the local economy than both large local businesses and national/global companies and organisations. Research on local authority spending undertaken by the Federation of Small Businesses showed that for every £1 spent with a small or medium-sized business (SME) 63p was re-spent in the local area compared to 40p in every £1 spent with a larger business.
Small businesses have the potential to be better able to respond and adapt quickly to changing economic climates, as their smaller capital/revenue accumulations can make them more flexible. A decision making process which may consist of only one person and react much faster than larger organisations with more complex management structures. They are also often more customer-focussed which can help them to retain a loyal customer base and stay afloat at times of economic downturn.
However, small capital/revenue reserves can also limit ability to adapt and expand, and small operations can sometimes lack skills outside of their core business areas. Support from local and national government, is often essential to help with things such as business and financial planning, improving skills and responding to new technology. Umbrella organisations for trade and commerce also have a role to play.
Small businesses do not always stay small, and small businesses that grow into large businesses often remain in the community in which the business was first established. Support for and investment in small businesses can be an investment in the future of the local – and even national or global – economy.
Tourism businesses are mainly small operations, many of them family run, and are often deeply rooted in the community. In addition, tourism supply chain links bring benefits to many small, local businesses. Income from tourism is often the difference between success and failure for many micro businesses. The employment/business sectors supported by the tourism industry in Conwy County Borough and Denbighshire include the visitor attraction, recreation, accommodation, retail and food sectors, as well as the large number of small local businesses such as tradespeople, wholesalers and support services who provide services and goods to those directly involved in tourism.
Other larger employers in the area benefit from the presence of a strong small business sector, as they are often providers of goods, services, and out-sourced contract work for big companies and institutions.
Town centre regeneration (see our ‘tourism‘ and ‘thriving culture‘ topics for further information) – which is a priority for many of our communities – can be helped by small businesses which fill gaps on the high street left by the retreat of national companies to large service centres and on-line retail.
Compared to the rest of Wales, Conwy County Borough and Denbighshire have a high proportion of the population who are self-employed – about 8,100 people or 16.5.0% of the working population in Conwy County Borough and 8,400 or 20.7% in Denbighshire (compared to 13.4% for Wales as a whole and about 13.5% for the UK). More people are self-employed in Denbighshire now than there were when we last undertook this assessment in 2017, and only slightly more in Conwy County Borough. However, there are in year fluctuations. 
At the same time a high proportion of the known businesses operating in the area are relatively small in size. Some 69.2% of businesses (3,845) in Conwy County Borough and 68.3% (3,155) in Denbighshire employ fewer than 4 people and a further 15.1% in Conwy County Borough and 14.5% in Denbighshire employ between five and nine people.
 Local Procurement: Making the most of small business, Centre for Local Economic Strategies, 2013
 Annual population survey, Office for National Statistics
 Annual population survey, Office for National Statistics
During the economic turbulence caused by recession and other events during 2000 and 2015, insolvency rates increased in the area significantly more than they did nationally. Anecdotal evidence from the local business community suggests that at least in part, this reflects the precarious nature of small business finances in the area. In 2020, insolvency rates per 10,000 adult population (aged 18+) stood at 28.7 for Conwy County Borough and 31 for Denbighshire, which is higher than the rates seen in 2015.
Succession planning for small businesses is an area which could benefit from support and improvement. Successful small businesses which have closed because of the retirement of owners/managers may have been able to continue if successors could have been found. Often these are family businesses which would traditionally have been passed on to the children. However, improving education and employment opportunities for younger generations have seen a move away from this tradition, with children making different career choices to their parents.
With cash in decline, online shopping is here to stay. However, people are looking to shop local where they can, but do more research online. Physical shopping is likely to be regarded as more of an experience than simply a transaction. Town centre recovery and growth will be very important moving forward, both in the short and medium term.
Ongoing business support for sectors with job creation potential and a competitive advantage to mitigate the impacts of Brexit and the Coronavirus pandemic will be important in the medium-term. There may be some long terms effects associated with Covid-19 recovery as some businesses will have used savings to keep their business afloat.
In its recent briefing (April 2020), the Centre for Rural Economy and Rural Enterprise UK, Newcastle University, highlighted the resilience of many rural areas – that have historically coped with severe challenge, such a Foot and Mouth Disease, but also stressed that rural areas were less likely to be eligible for Covid-19 recovery support and more likely to have limited access to other services to support community and individual well-being. ‘Rural women entrepreneurs’ were highlighted as a group particularly challenged by the pandemic; as they tended to operate a micro (or bigger)-business alongside childcare and home-schooling, and older people were seen as critical to volunteering efforts in rural areas.
 Covid-19 and rural economies, Briefing note prepared by staff of the Centre for Rural Economy1 and Rural Enterprise UK2, Newcastle University, April, 2020. Jeremy Phillipson, Matthew Gorton, Roger Turner, Mark Shucksmith, Katie Aitken-McDermott, Francisco Areal, Paul Cowie, Carmen Hubbard, Sara Maioli, Ruth McAreavey, Diogo Souza Monteiro, Robert Newbery, Luca Panzone, Frances Rowe and Sally Shortall
People recognised that tourism was of key importance to local employment. There is a need however to support tourism to flourish all year round.
Some parts of the industry have expressed concerns about recruiting and losing staff what with the continuing uncertainty created by the Covid-19 pandemic.
People have also told us they would like to see:
Education, training and employability support for people of all economic activity levels
Education, training and employment for young people
Sustainable employment; not just seasonal work
Different types of private employers attracted to the area to increase jobs and support the economy
Recruitment issues in certain undesirable sectors tackled e.g. social care and hospitality
We may get some new information in relation to small businesses from the review of the Regional Regeneration Plan and the work of Regeneris, who have been commissioned by the North Wales Economic Ambition Board to look at the economic impact of Covid-19 on the region.
To what extent is are micro businesses green and sustainable?
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