Enabling Enterprise

3.1. Enabling small businesses and meeting their most essential needs

Component RTE

Post Office supports and sustains the United Kingdom’s economy by providing essential services to small and medium-sized enterprises (SMEs)¹⁰ to help run their businesses and drive economic growth – whether that be a shop owner depositing their takings at the end
of the day or a marketplace seller posting a product to their customer.

This research highlights that businesses rely on Post Office to operate with great consistency. In fact, nearly three in 10 (28%) SMEs use the Post Office network at least once a week, while more than half (51%) use the branch network at least once a month – and six out of seven (86%) use it at least once a year. These figures highlight how Post Office services enable and support the business operations of SMEs through the entirety of the United Kingdom – indeed there are likely few other single organisations that are relied upon with such frequency by small businesses. Importantly, Post Office supports both those small businesses using it every week (for whom it is likely to be an essential service) as well as those businesses that use it infrequently, but for whom it is convenient and easy to use when it is needed.

Surveys clearly support this view, with SMEs placing a significant value on Post Office’s branch network, particularly the convenience of having a branch close to their business. Our research revealed that the value of the Post Office network to SMEs per year is nearly £1 billion (£984m).¹¹ Expressed differently, SMEs are willing to pay £176 per year (just under £15 per month) in order to maintain the Post Office network. This social value (the value of the Post Office network that is not captured through prices) is particularly high for small enterprises (10 to 49 employees), which valued the network at over £23 each month.

Convenience is a particularly important feature of their local post office for SMEs, as nearly six out of seven (85%) SMEs rated Post Office being nearby and convenient as important to them. The importance of distance is further reflected by the fact that SMEs would be willing to pay an average of an additional £25 per year to prevent their local post office from moving a mile further away. SMEs that have a post office close by (less than one mile away) value an extra mile’s distance more highly, at £59 per year (over double the figure for the average SME).¹² The convenience of Post Office is also reflected by it being a one-stop shop for SMEs, with nearly seven in 10 (68%) SMEs believing it important that Post Office provides a range of services in one place.

¹⁰  Defined as businesses with fewer than 250 employees.
¹¹  This result uses an open-ended contingent valuation model. Details on why this model  was prioritised and how the annual social value of the Post Office network as a whole was derived are provided in Annex 1.
¹²  This is unsurprising, as businesses who are already relatively far from their nearest Post Office already must travel long distances, so an extra mile makes a more limited difference, whereas those with a Post Office nearby would be greatly affected by it moving further away due to the negative impact it would have on their business.