We’re a nation known for startups rather than entrepreneurs’ ability of scaling up. Earlier this month, the Financial Times highlighted how our “UK startup revolution shows no sign of ending“. According to think-tank The Centre for Entrepreneurs, 660,000 companies were established last year, up from 608,000 in 2015.
A rising number of startups is music to my entrepreneurial ears, and in addition to this, over the last 15 years, funding initiatives like the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme have provided almost £15bn to 30,000 businesses.
Again, that’s great, but I have to ask why, when we’re so good at creating a startup, do we struggle when it comes to scaling up?
As an entrepreneur it’s important to have ideas down to a tee and know the company inside out, but you can’t rest on your laurels because that alone isn’t enough.
To take a business to the next level, it’s important to have a sturdy plan, with the right advice and funding. You also need the ability to support a boost in growth if and when it happens. Without these in place we’re ultimately setting ourselves up for failure.
Let’s be honest, some companies are happy enough with the way things are, but there are those who can see a demand in the market and are looking to scale-up without the knowledge of what steps to take.
There are various things to take into consideration when expanding a company. For example, and maybe biggest of all, is what lasting financial impact it will have. Money doesn’t grow on trees after all.
Knowing where to look for financial aid is vital and though bank loans or outside investment are available, making the most of government-backed funding, as proven by the earlier startup stats, is a good way to provide some relief.
However, with Brexit negotiations looming there’s a lot of uncertainty over some current forms of funding and whether they’ll come under fire. A lot of businesses for instance, have used the European Investment Fund for extra help, but now less UK companies are able to access the scheme.
If we’re going to see changes or an overhaul of current funding, we need a new, solid replacement, to instil confidence in existing businesses who want to develop.
The next platform for us to see any inclination of this is the Chancellor’s Autumn Statement, set for next month. During last year’s statement, Philip Hammond vowed to provide the British Business Bank with an extra £400m to invest in UK startups looking to scale.
It’s also worth noting that Margot James, the small business minister, has started a scale-up task force to identify actions to help companies.
Perhaps one too many times, businesses’ needs and hopes for the future have fallen on deaf ears, and I hope this isn’t one of those times. If we want to continue to be recognised as a country full of growing, thriving businesses, then we do undoubtedly need active involvement from the Treasury.
We also need to play our part and rather than, in some cases, become complacent, take a leap of faith and see where scaling up can take us.