2 min read
Are you scaling-up or do you aspire to scale-up your business?
30 second summary:
The Scale-Up Institute identified 3 characteristics of scale-ups which include firm focus on planning, innovation and productivity. Typically, 3 challenges faced by scale-ups include access to markets, people and management development and access to appropriate finance and growth capital. This is the first in a series of articles about scaling-up, which will look at these top challenges and others and how to address them.
If you’re scaling-up your business or aspire to, make sure you consider these 3 characteristics and 3 challenges.
The OECD definition of scale-up (or high growth) is growing turnover by more than 20% a year over a period of three years, with at least 10 employees at the start of the period.
In 2020, there were 27,285 scale-ups in the UK. These are visible scale-ups who disclose their turnover in their filed accounts - the number is actually much higher, as many SMEs have abbreviated accounts.
If you are looking to scale-up your business, it is worth considering the 3 characteristics and top 3 challenges of Scale-Ups, from the extensive research carried out by the Scale-Up Institute in 2020.
3 Characteristics of Scale-ups
- They plan to grow
9 out of 10 scale-ups expect to scale again in the coming year. 1 in 3 expect to achieve 50%+ turnover growth.
- They are innovative
3 in 4 scale-ups have introduced or improved a product/ service/process in the last 3 years.
- They are productive
Scale-ups are more productive than their peers, generating an average of £328,000 turnover per employee.
Top 3 Challenges of Scale-ups
1. Growth and Access to Market Challenges
When CEOs were asked to force-rank the greatest barriers to growth and their priorities to address, access to markets was top of their lists.
Scale-ups want to sell to and collaborate with large corporates, and public sector organisations yet insufficient traction and/or options occur at present.
Access to international markets continues to grow as an issue for scale-up leaders, with nearly half of them rating this as a vital or very important factor in their future growth.
2. People and Management Challenges
Building the leadership and management capacity within their senior teams has always been a focus of scale-up CEOs.
Developing the senior team through training (70%) remains the top factor that scale-up leaders feel will aid their growth, alongside individual development. They are also seeking to augment their teams by strategic recruitment of top-level talent (54%), plus increasingly, they are looking for support from non-executive directors (56%) - with access to effective mentoring is also recognised as valuable (36%).
Key future skills for scale-up employees are critical thinking (79%) and service orientation (61%).
Six out of ten scale-ups say that access to talent is vital to the continued scaling of their business and they continue to demand a wide range of skills. They employ a mix of graduates (79%), post-graduates/PhDs (47%), and school leavers (36%). 60% offer either apprenticeships or work experience, while one-third offer internships.
3. Finance Challenges
Access to appropriate finance and growth capital is increasing as a challenge for scale-ups into 2021.
Three quarters of scale-ups are using external finance (75%). Of those, six out of ten feel they do not have the right finance in place for their business.
Maintaining access to innovation and R&D funding schemes is seen as very important to six in ten scale-up leaders.
We will be looking at these top challenges and others and how to address them in a series of articles over the next few months.
We will share case studies of clients who we are supporting as they are scaling-up.
In the meantime, if you would like support to address the challenges in scaling up your business, book a call.
Book an exploratory call to find out how we can help you unlock your business potential.Book Now
Don't miss our latest insights
Subscribe to our Resource centre
Other articles that may interest you:
Develop your Exit Strategy – 8 Drivers that Optimise Your Business Value
Especially with all the uncertainty of today’s political climate, how ‘saleable’ is your business? If you would like to have the choice of selling...
Growing business, by developing a coaching culture within a leadership team.
Our client Our Client is a highly successful Financial Services organisation. With the increasing complexity and volatility of the sector, ou...
Contact us for a no obligation chat about how Rathbone Results can help you unlock the potential in your business.Book a call