LGBTQ+ entrepreneurs contribute £106bn to the UK economy each year, confirms study

The LGBTQ+ community, a growing force in the entrepreneurial ecosystem, is contributing significantly to the UK economy, according to a groundbreaking open report from OutBritain, the UK’s first LGBTQ+ Chamber of Commerce. Titled "LGBTQ+ Businesses Count: The Contribution and Challenges of LGBTQ+ Businesses in the UK," the report highlights the community's economic power while focusing on the unique hurdles LGBTQ+ business owners face.

The report estimates that LGBTQ+ businesses contribute a whopping £106 billion in turnover each year – an indication of their substantial yet often overlooked impact. These enterprises not only create wealth but also foster inclusive local economies by employing LGBTQ+ individuals, generating tax revenue, and enhancing community cohesion. With many small businesses (SMEs) in the UK LGBTQ+-owned, the findings suggest that at least 750,000 jobs in the UK are supported by LGBTQ+ companies.

LGBTQ+ entrepreneurs are dynamic drivers of change and innovation, noted the report. From neighborhood coffee shops that act as social hubs for local LGBTQ+ communities to fast-growing startups at the forefront of sustainability and health-tech, these businesses reflect both cultural and economic resilience. High-profile LGBTQ+ enterprises such as Global Media and Entertainment, with an annual turnover of £806 million, demonstrate that LGBTQ+ entrepreneurs are competitive players in diverse sectors, from media to theater.

The report also found that LGBTQ+ businesses don’t merely contribute in terms of revenue; they embody an ethos of authenticity and resilience, qualities that have proven advantageous in navigating today’s competitive markets. Many LGBTQ+ entrepreneurs report that their identity enriches their business approach, with 83% attributing business benefits to being LGBTQ+, including increased determination, innovative thinking, and strong connections within the LGBTQ+ customer base.

Despite their contributions, LGBTQ+ business owners face distinct challenges, ranging from discrimination to isolation from mainstream business networks. More than half of the LGBTQ+ business founders surveyed cited unique struggles, including a pervasive sense of doubt (53%), intrusive questions about their personal lives (44%), and a lack of LGBTQ+ role models in the business world (44%). Discrimination (37%) and limited access to professional networks (36%) are additional obstacles that hinder growth and success.

The report also notes a concerning trend of "re-closeting," where some LGBTQ+ entrepreneurs choose not to disclose their identity due to societal polarization and a perceived lack of acceptance in the business community. The data indicate a need for targeted support to help LGBTQ+ entrepreneurs overcome these systemic barriers and thrive in their industries.

The report’s findings emphasize that inclusion efforts must extend beyond employment practices to supplier diversity programs. Nearly half (46%) of LGBTQ+ entrepreneurs expressed a desire for increased opportunities within corporate supply chains. However, navigating the complex tendering processes of large corporations can be a challenge for smaller LGBTQ+-owned businesses. OutBritain has begun addressing this gap by certifying LGBTQ+ businesses, thereby facilitating connections with corporate clients seeking diverse suppliers.

Additionally, the report calls for stronger support mechanisms. LGBTQ+ entrepreneurs need more robust networking, funding, and mentorship opportunities, with 67% indicating a desire for enhanced networking, 58% for better funding, and 50% for business development resources. These needs point to a demand for tailored support that mainstream business networks and government initiatives could address through programs and partnerships with organizations like OutBritain and Series Q.

Recommendations for meaningful change

To maximize the impact of LGBTQ+ businesses, the report proposes three major recommendations:

1. Collect Better Data: Reliable data on LGBTQ+ business ownership is critical. The report advocates for voluntary disclosure of sexual orientation and gender identity in business surveys and official records, such as those maintained by Companies House, to better inform public policy and corporate strategy.
2. Provide Distinct Support: Recognizing the unique challenges LGBTQ+ entrepreneurs face, the report suggests dedicated support programs from both the government and private sector. Establishing a UK-wide LGBTQ+ business envoy could ensure LGBTQ+ voices are represented at all levels of government.
3. Develop Supplier Diversity: Supplier diversity isn’t just a moral commitment but a strategic business move. Companies are encouraged to report on their procurement spending with LGBTQ+-owned businesses, integrate supplier diversity into procurement policies, and showcase their success stories to encourage others.

By implementing these recommendations, the UK can empower LGBTQ+ entrepreneurs to reach their full potential, ultimately boosting job creation, wealth generation, and tax revenue while fostering inclusive communities across the nation. Click here to read the full report.