4 best sectors for start-up SMEs to venture into

Which business sector should your start-up pursue? Tom Stephens has some suggestions

It has long been known that one of the UK’s greatest strengths economically is that there is such a high proportion of SMEs, especially when compared to European counterparts.

The UK has one of the highest SME densities in the world, with over 70 small-to-medium sized businesses for every 1,000 people and, unlike many other developed countries, does not have any sectors that are completely dominated by just a few huge companies.

What is less well-known is that, in 2018, some sectors are better than others, and look projected to grow at astonishing rates.

If you’re setting up an SME in the UK, here are the top four sectors you should consider entering.

Personal services

Perhaps this might not seem like too much of surprise, given the number of UK-based former SMEs that already dominate in this area, such as Ocado or Deliveroo – but it’s definitely worth highlighting, considering that almost 20 per cent of all businesses in this sector are SMEs, and that number looks set to grow even further. Thanks to a healthy funding ecosystem, small businesses offering personal services ranging from food delivery to fashion, home repair and wellness have been able to thrive in the UK. If you choose to launch a personal services start-up, you could thrive too.


The gaming sector in the UK is already one of the most competitive in the world and is led by both large and small developers and platforms. The UK gaming sector posted astonishing growth of over 12 per cent last year, a number which looks set to rise in 2018, meaning now has never been a better time to join the action. Online casino and betting giant Paddy Power, offers millions of customers slots, roulette, digital scratch cards, and multi-million-pound jackpots. It’s thanks to its success that smaller, indie games platforms such as Criterion and Hutch are able to thrive.

Online retail

While many may be mourning the slow death of high street giants such as Marks & Spencer or John Lewis, it’s certainly a good time to be a small-scale retailer, specifically an online one. By 2019, the e-retail sector in the UK is predicted to make up 20 per cent of the entire retail market, meaning demand for SMEs in this area is strong. The UK is a world leader in boutique online retailers, with small operations such as Trouva, launched only a couple of years ago, already pulling in billions in sales. There have also been plenty of success stories in recent years, where SME retailers have gone on to become retail giants, such as Boohoo, ASOS and Gymshark, which shows that the potential returns for new businesses in this sector look hugely promising.

Creative arts

The creative arts sector in the UK is bigger than the creative sectors in any other country bar the US, meaning the climate for smaller enterprises is highly favourable. Many creative arts start-ups also receive funding and backing from industry leaders such as the BBC and Channel 4, allowing them to gain expertise from some of the top creative minds in the country. One great example of a new SME taking advantage of this climate is SeenIt, a London-based start-up which edits and sells smartphone footage to marketing giants, and has already amassed over £1.2 million in annual revenue.

The UK has always punched well above its weight when it comes to small businesses and, with the help of some of the bigger companies, this nation of shopkeepers will continue to do what it has always done best.

Tom Stephens is an independent technology writer