New figures have revealed that Lincolnshire lost hundreds of micro-businesses last year.
Between March 2017-18 the number of local micro-businesses, defined as employers of fewer than 10 people, fell from 25,060 last year to 24,560 this year.
That’s a decrease of two per cent – a slightly bigger drop than across the rest of the UK, where the number of micro-businesses has only fractionally decreased.
Office of National Statistics data shows that the compact companies made up 89 per cent of all the VAT or PAYE-registered businesses in Lincolnshire, the same as the UK average.
The figures include VAT or PAYE-registered businesses based in the area, so they represent local independent businesses and head offices rather than branches of UK-wide chains.
Businesses with a turnover of above £85,000 must register for VAT, although a small number may choose to register voluntarily, and all employers must register for PAYE.
Self-employed people, who make up an estimated 76 per cent of all private sector businesses, are not counted in the figures.
Across England, there were more than two million micro-businesses active in March 2018.
Out of the 24,560 local micro-businesses in Lincolnshire, 86 per cent had fewer than five employees.
Tim Vorley, professor of entrepreneurship at the University of Sheffield, says that a fall in the number of micro-businesses could be a result of a lack, or perceived lack, of business opportunities.
But he stressed that it doesn’t necessarily mean that the local economy is in trouble.
He said: “There can be growth challenges if people don’t believe they can grow a business.
“We need to look at business survival rates, and focus on ensuring longevity and growth.”
Jordan Marshall, policy development manager at the Association of Independent Professionals and the Self Employed, said people in local communities continue value micro-businesses, like independent, family-run shops.”
But he added that the resources available for micro-businesses varies a lot depending on where they are located and that council-funded initiatives like co-working and networking spaces can help micro-business owners reduce costs.
He said: “The extent to which the council supports these spaces will have quite a big effect on independent businesses.”
Mr Marshall also said that advances in technology have made it easier for people to run micro-businesses from home.
He added: “Remote working means you can operate a business from anywhere.
“You’re not dependent on large employers, and you can have clients anywhere in the world.”