IT companies are punching above their weight in earnings
Companies and consultancies which provide IT and technical services are one of the fastest growing sec tors in the UK, according to a recent report. With micro-businesses increasingly being recognised for their contribution to the UK economy, the fact that these small businesses are holding their own in terms of earnings .
The Royal Society for the encouragements of Arts, Manufactures and Commerce have conducted a study which has demonstrated that the average revenue generated by an employee of an IT-based micro-business has been around £77,000 over the past four years. Although this may be lower than the average amongst the entire IT sector, which stands at around £151,000, it is still considerably higher than the per-head turnover for micro-businesses in the accounting or legal sectors, which averaged at £65,000.
The report has also identified the ongoing improvement of technology as a key factor in the viability of micro-businesses across all sectors. With five million small businesses operating in the UK at the moment (a significant increase on the 3.4 million operating in 2000), they now represent around one third of private sector employment. This is due, in part, to the increasing availability and falling costs of high speed broadband, data storage and quality computing which has allowed entrepreneurs to get their companies off the ground without the huge start-up costs which were typically associated with doing business.
The plethora of ‘plug and play’ opportunities which allow businesses to benefit from cheap running costs include programmes which give people the ability to communicate for free, such as Skype, cheap advertising on platforms such as Google and even finding staff using online marketplaces. The internet allows business owners to access global markets, with the ability to contact suppliers, clients and customers all over the world.
Although some people believe that small businesses are unable to compete with their larger counterparts when it comes to innovation, productivity and providing high-paying employment opportunities, this is not the whole picture of the role micro-businesses play. This perception may be incorrect though as the RSA’s research suggests that small businesses are responsible for ‘intangible’ innovation and that they may be able to ‘scale up’ given the right support and opportunities by policy makers.
If you are keen to make the change from permanent employment to become an IT contractor then our resources could help you to maximise your income as an independent professional. You can use our contractor take home pay calculator to work out what you could be earning and we also have a comprehensive guide to contractor tax which can help you to understand the ins and outs of your financial position.
Our accountants all specialise in dealing with independent professionals, contractors and freelancers, so we are able to offer you detailed advice which will help you achieve your business goals. For more information on how we could help you, give us a call today on 01442 275789 or email your enquiry to firstname.lastname@example.org.