20 years in business

Since was founded in the year 2000, the UK business landscape has changed considerably. We take a look at the people, businesses, and events that have shaped the last 20 years

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Written and reviewed by:
Henry Williams headshot

When was founded in the year 2000, the UK was home to 3.5 million private sector businesses, 99.9% of which were small and medium-sized enterprises (SMEs).

At the turn of the millennium, the world was still enjoying that hopeful decade between the fall of Soviet Communism and the start of the War on Terror.

Economies were booming, Britain was still squeezing some optimism from the twin phenomena of New Labour and Cool Britannia, and everyone was getting very excited about the first generation of something called ‘internet businesses’.

Today, the UKs business landscape looks very different. SMEs still constitute 99.9% of the UK’s business population, but there are 5.9 million of them. Self-employment has risen from just 12% of the labour market to 15.3%. And nearly every business is an internet business.

So, how did we get from there to here?

Below, we go on a whistle stop tour of the last 20 years, taking in the events, people, and businesses that have been responsible for shaping and transforming the last two decades in UK business.

2000 – SME population: 3.46 million

Startups 2000

The world breathes a collective sigh of relief as fears that the incorrect storage and formatting of calendar data due to the Millenium bug would bring about the apocalypse prove to be unfounded.

With the Y2K problem nipped in the bud, the business world returns to what it had been doing in the late 90s: excessive speculation in internet stocks.

It’s a bonanza for any dot-com or internet startup, with investors casting due diligence aside in favour of a blind faith in the future returns of the ‘new economy’. Many of these companies go public before they’ve even turned a penny in profit.

But in March, the dotcom bubble bursts. Shares crash, fortunes are lost, and some of the most hyped businesses of the era go bust overnight.

One notable British failure is, an online clothing retailer founded exactly one year earlier, which files for bankruptcy in May 2000.

Others are luckier. – a late holiday deals website founded by Martha Lane Fox  and Brent Hoberman – floats on the London Stock Exchange in March, only to see its share price plummet two weeks later. It limps on to an uncertain future.

In April, the Small Business Service is established. Its mission: “To make the UK an enterprise society which is the best place in the world to start and grow a business”.

And the government’s annual Business Population Estimates statistical release is published for the first time.

Meanwhile, video Game entrepreneur David Lester launches, an advice and guidance website for small business owners and aspiring entrepreneurs.

Startups 20 businesses founded:

  • JustGivinga charitable fundraising platform
  • Mumsnetan online forum for parents

2001 – SME population: 3.49 million

A foot-and-mouth epidemic ravages the UK. More than six million livestock are slaughtered in an attempt to halt the disease. The overall cost to the UK economy is estimated to be £8bn.

On 11th September, two hijacked Boeing 767s are flown into the World Trade Center’s Twin Towers in Manhattan. Nearly 3,000 people are killed and global stock markets crash. The London Stock Exchange declines by 5.7% overnight.

2002 – SME population: 3.56 million

The UK economy stagnates in the first three months of the year, but the BBC reports on a growing trend for something called e-shopping, which has increased by a staggering 39% on the previous year. In total, £23.3bn is spent online, accounting for 1.2% of all sales.

Notable British ecommerce companies launched in 2002 include adult toy and lingerie company Lovehoney.

2003 – SME population: 3.67 million

The Institute for Employment Studies conducts its first Annual Small Business Survey, with over 8,000 respondents.

The report finds that 50.9% of small businesses are managed solely by men, while 12.3% are managed by a majority of women. The rest have women among their directors, but not in a majority.

When asked about barriers to achieving their business objectives, 16.2% say competition, 14.5% say regulation, and 12% cite the economy as their main obstacles.

The UK economy begins to recover slowly throughout the year.

And publishes its first ever Young Guns index, a list of the 30 most promising entrepreneurs under 35 years of age in the UK. Among them is Innocent Drinks founder Richard Reed.

2004 – SME population: 3.91 million

The UK economy sees its best year since 2000, growing by 3.1% in total throughout 2004.

Facebook is launched. Eventually, it will become a vital marketing tool for small businesses across the world, as well as for demagogues, terrorists, and all manner of hate groups. But for now it is a social student directory for Harvard University.

2005 – SME population: 3.92 million

Startups 2005

Two ongoing BBC business reality shows, Dragons’ Den and The Apprentice, arrive on our television screens.

Starting on 4 January 2005, Dragons’ Den gives hopeful entrepreneurs the chance to pitch their business ideas to a panel of wealthy investors. It brings us Startups 20 business Levi Roots Reggae Reggae Sauce, and teaches us some all important lessons about having a firm grasp of your financials before going into a business pitch.

The Apprentice begins in February, following the success of the US original, which was hosted by a man called Donald Trump, a billionaire New York real estate magnate and owner of the Miss Universe beauty pageant franchise. The show sees two teams of cocksure candidates compete in a variety of increasingly ludicrous business-related tasks in a bid to land a spurious position at one of Lord Alan Sugar’s companies.

In other news, the World Bank ranks the UK ninth out of 155 for ease of doing business.

Startups 20 businesses founded:

  • Zopapeer-to-peer lender

According to a 2016 report from the Centre for Public Impact, presenting The Apprentice increases your odds of political success by 18,000 times!

Yes, Trump is not the only Apprentice presenter to be elected to high office. In fact, of 33 presenters across 29 different countries, 12 have have gained political office of some sort, including the former prime minister of Georgia Lado Gurgenidze, the former mayor of São Paulo João Doria, and Denmark’s Klaus Riskær Pedersen, now a member of the European Parliament.

2006 – SME population: 4.11 million

The Companies Act 2006 comes into force. It is the longest Act in British Parliamentary history, containing 1,300 sections over 700 pages.

The Act changes almost every aspect of the Companies Act 1985, with new provisions for directors’ duties, and private and public companies. It also transposes the EU’s Takeover Directive, which deals with mergers and acquisitions, and the Transparency Directive into UK law.

Startups 20 businesses founded:

2007 – SME population: 4.26 million

Startups 2007

A record 471,500 businesses are started in 2007 – the highest level for 20 years. However, the number of businesses closing down increases by 8% on the previous year due to the slowing economy.

2007 also sees the launch of Twitter and the iPhone, both of which will transform the way businesses operate and interact with their customers.

And asks the big questions: “Are Jordan and Posh Spice really inspiring young women to start their own businesses?”

Startups 20 businesses founded:

2008 – SME population: 4.27 million

The global economy crashes and the UK suffers its worst recession since the Second World War. GDP shrinks by 6% in total over six consecutive quarters, and wages and employment fall sharply.

However, the recession proves fertile ground for a new generation of entrepreneurs, who respond to these unprecedented economic circumstances with bold, game changing ideas.

One of the big disruptions to the world of work is the emergence of the gig economy, using technology to match flexible workers with businesses and consumers for a variety of on-demand or temporary functions. Notable businesses include Uber, Airbnb, and Startups 20-featured Deliveroo.

In the same year, we publish our inaugural Startups 100 index, celebrating the 100 most innovative and disruptive businesses of the year., a price comparison website tops the list. It goes on to be acquired by Google in 2013. In third place is Startups 20 business Zopa, the world’s first peer-to-peer lending and borrowing marketplace.

Startups 20 businesses founded:

  • Zoopla – online property information database

2009 – SME population: 4.36 million

The UK ploughs on into its longest recession on record. In light of this, The Bank of England cuts its base interest rate to 0.5% – the lowest of its 300-year history.

In January, the government unveils a £20bn loan guarantee scheme to support small and medium sized businesses.

Startups 20 businesses founded:

  • Crowdcubeequity crowdfunding platform
  • Seedrsequity crowdfunding platform

2010 – SME population: 4.47 million

Startups 2010

On 6 May, the general election results in a hung parliament. The Conservatives and the Liberal Democrats enter into a coalition. Conservative leader David Cameron becomes prime minister, and Liberal democrat leader Nick Clegg becomes deputy prime minister.

The conservative manifesto contains a number of policies intended to help small businesses during the ongoing financial crisis. A planned increase to national insurance for employers and workers earning less than £35,000 a year is scrapped, and corporation tax is cut to 20%.

Respondents to the Annual Small Business Survey say the economy in general (33%) is their biggest barrier to success – a 17% increase on the 2007-08 survey. It also finds that 8% of small and medium-sized businesses are led by someone from an ethnic minority, showing no increase on the 2007-08 survey.

51% of those who had sought finance within the previous 12 months had experienced difficulties obtaining it from the first source they approached – more than twice the proportion that reported experiencing difficulty in 2007-08. 35% were not able to obtain finance from their first source.

Startups 20 businesses founded:

2011 – SME population: 4.58 million

The Apprentice has a format shake up. The candidates now compete for a £250,000 investment in their business idea instead.

Winners include 2016 Young Gun Mark Wright, who went on to found digital marketing agency Climb Online – possibly the most successful Apprentice winner there’s ever been – and 2017 Young Gun Joseph Valente, who went on to found boiler installation firm ImpraGas – also possibly the most successful Apprentice winner there’s ever been.

2012 – SME population: 4.81 million

Despite a much shouted about £9.9bn boost to the UK economy during the London Olympics, and a £4bn windfall for the capital alone, many small businesses see no direct impact from the games, and many lose out.

According to a Guardian poll, just 16% say the games have had a positive impact, while 84% say they’ve not received any extra business.

Many complain of excessive use of “Berlin Wall-like” barricades reducing footfall to key shopping areas, as well as various other council-enforced restrictions.

One billion smartphones are now owned worldwide.

Startups 20 businesses founded:

  • Deliveroo on demand restaurant meal delivery service
  • Gymshark gym and workout wear

2013 – SME population: 4.90 million

Startups 2013

The first ever Small Business Saturday takes place on 13 December. Inspired by the US campaign of the same name – started by American Express in 2010 – the initiative encourages consumers to shop local and support small, independent businesses both on the high street and online. It generates hundreds of millions of pounds

Startups 20 businesses founded:

2014 – SME population: 5.23 million

In a speech to the Federation of Small Businesses (FSB), David Cameron announces that the Conservatives will scrap or amend thousands of rules that affect small businesses.

In total, he says, more than 3,000 rules will be dropped or changed under the government’s Red Tape Challenge, including 286 pages of hedgerow regulations…

Measures include a £1.1bn package of business rates relief, £100m in broadband vouchers to help small businesses get online, and up to £2,000 each in growth funding for 20,000 small businesses.

The government’s own figures report that the initiative has saved each UK business £230 annually.

But in fact, far from supporting the Red Tape Challenge, a report from finds that 75-80% of participants would prefer to maintain or strengthen existing regulations, not weaken them. Many of the regulations eventually dropped are so called ‘zombie’ provisions, and therefore deliver no cost savings.

Startups 20 businesses founded:

2015 – SME population: 5.38 million

The Small Business, Enterprise and Employment Act (SBEEA) receives Royal Assent in March.

The wide-ranging act includes provisions for everything from childcare to employment and access to finance. Its two main aims are to improve transparency and trust in UK companies – in light of a general decline since the financial crisis – and to simplify a number of company filing requirements.

A record breaking 608,110 businesses are founded in the course of the year, showing a sustained year-on-year increase from 2014 (581,173), and 2013 (526,447). The Centre for Entrepreneurs suggests the UK is undergoing a sustained shift towards entrepreneurialism as societal attitudes towards work change. Autonomy and flexibility are increasingly more important than having a long and stable career.

At the same time, a Global Entrepreneurship Monitor report finds that there is “a high level of regard” for entrepreneurs in the UK, and that optimism about startup opportunities has recovered to pre-2008 levels.

Startups 20 businesses founded:

  • Bulb100% renewable electricity and 100% carbon neutral gas energy provider

2016 – SME population: 5.49 million

On 23 June, in a shock referendum result, the UK votes by a narrow margin to leave the European Union. Although a decision on the UK’s future relationship with the EU is still a long way off, many small businesses are concerned that the outcome could have severe implications for international trade, access to talent, and for the health of the economy at large. Prime minister David Cameron resigns.

In November, in another shock result, the presenter of the US Apprentice is elected president of the United States of America.

2017 – SME population: 5.68 million

Another general election. Theresa May’s gamble doesn’t pay off and she loses her majority. This severely weakens her negotiating position with Brussels and her power to pass legislation in parliament, making a quick resolution to the UK’s departure from the EU less likely than ever. Small businesses are left in limbo.

In February, is acquired by lead generation firm MVF Global, which appeared in our Startups 100 index just five years earlier, and Young Guns the year before that.

2018 – SME population: 5.66 million

2018 witnesses the first fall in the SME business population since 2000.

General Data Protection Regulation (GDPR) comes into force across Europe. It’s primary aim is to give individuals more control over their personal data, and to implement stricter regulations around how businesses store and process data about their customers.

Startups 20 businesses founded:

  • Cazooused car seller

2019 – SME population: 5.86 million

Startups 2019After several failed attempts to get her withdrawal bill through parliament, Theresa May resigns as leader of the Conservative party. Boris Johnson becomes leader of the party in July and wins a massive majority in December’s general election.

In the same month, the first reports of a novel coronavirus in Wuhan, China emerge.

2020 – SME population: 5.97 million

As COVID-19 cases climb around the world, countries begin to implement measures and restrictions of varying severity to halt the spread of the disease.

Britain goes into a nationwide lockdown on 23 March, forcing thousands of small businesses to close for an indefinite period. Many had already been struggling with dwindling customer numbers before the lockdown, so chancellor Rishi Sunak’s announcement of an unprecedented package of financial support for businesses forced to shut their doors is welcome news.

By the summer, the economy starts to slowly reopen. Retail and hospitality businesses are allowed to operate as long as they have strict social distancing measures in place.

In the Autumn, as cases begin to rise, the government introduces a three-tiered lockdown system, meaning businesses in different parts of the country will be subjected to different restrictions depending on the local threat.

Nevertheless, the latest Business Population Estimates – published on 8 October – are encouraging:

  • The private sector business population has increased by 113,000 (1.9%)
  • SMEs employ 16.8 million people – 61% of working people in the UK
  • Total SME turnover is estimated to be £2.3 trillion (52% of all private sector turnover)

What next?

It’s been quite a couple of decades, for the world, and the world of business.

Global events have caused terrible tragedy, and inspired incredible change. Startups have captialised on new technologies such as the smartphone and social media to transform the way we do, well, everything. And we’ve been through more than our fair share of financial crises.

There will always be factors outside of your control – risk, reward, and unpredictability are all part of the game when starting a business. What we think the above proves is that, no matter what kind of climate you’re starting up in, great ideas and perseverance win out in the end. Just click on the links above and read the inspiring stories of our Startups 20 businesses.

Whatever happens in the near future, the UK’s small businesses have proved themselves a resilient and adaptable bunch, far more so than their large, lumbering cousins. Not only have they survived, many have thrived, and done amazing things to help other people and businesses in their communities.

Who knows what major events and new technologies will shape the next 20 years.

We at Startups can’t wait to find out.

Written by:
Henry Williams headshot
Henry has been writing for since 2015, covering everything from business finance and web builders to tax and red tape. He’s also acted as project lead on many of our industry-renowned annual indexes, including Startups 100 and Business Ideas, and created a number of the site’s popular how to guides.
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