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.^[1]

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).^[2] 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. ^[3]

At the same time a high proportion of the known businesses operating in the area are relatively small in size.^[4] 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.

[1] Local Procurement: Making the most of small business, Centre for Local Economic Strategies, 2013

[2] Annual population survey, Office for National Statistics

[3] Annual population survey, Office for National Statistics

[4] UK business: activity, size and location, Office for National Statistics. https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/datasets/ukbusinessactivitysizeandlocation