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Record year for small businesses in Sweden – and one region is doing really well

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Record year for small businesses in Sweden – and one region is doing really well
Small businesses in Sweden saw excellent growth in 2017. Photo: Jonatan Stålhös/imagebank.sweden.se
07:58 CEST+02:00
A booming economy gave small businesses a boost in 2017, with entrepreneurs across Sweden chalking up a record year of profitability. And the top region wasn't even startup hub Stockholm.

The average profitability of Sweden's small businesses (firms with not more than 10 employees) landed at a whopping 24.3 percent of revenue last year – up by 0.5 percentage units – according to consultancy and accounting firm LRF Konsult's profitability barometer.

"Profitability has increased for the fourth consecutive year and the country's small businesses drive the Swedish economy. They benefit from the economic boom and also contribute to, among other things, increased employment," said LRF Konsult's CEO Katarina Klingspor in a statement.

The university town of Uppsala outperformed all other regions in Sweden, with a profitability rate of 27.9 percent – better than both southern Sweden's 26.4 percent and Stockholm's 20.2 percent.

Uppsala is located less than an hour's train ride north of Stockholm and benefits from lower costs than in the capital as well as access to tech and science networks within the university. Stockholm-based businesses meanwhile struggle against high costs both of premises and staff.

READ ALSO: Stockholm office space the second priciest in Europe

"One possible reasons why small businesses in Uppsala have had such good profitability growth could be the proximity to a large market in Stockholm and the Mälardalen region, while costs are lower in Uppsala than in the capital region," read the report.

The Västernorrland and Jämtland regions in northern Sweden had the lowest profitability, 18.4 percent. However, it also saw the biggest growth, with profitability increasing by two percentage units.

The report said that the challenges faced by small businesses in northern Sweden were linked mainly to poor infrastructure and difficulties attracting staff with the right skills for the job.

READ ALSO: 'Northern Sweden should vote on independence'

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