Almost half (42%) of the scale-up businesses in construction and real estate believe that the Government’s approach to Brexit and international trade will benefit them, while 40% say it will have no impact at all, according to a new report: Dream bigger: The scale-up moment, from Smith & Williamson, the accountancy, tax and investment management group.
Scale-ups(defined as an enterprise which has grown in either headcount or revenue by 20% for three consecutive years, from a starting position of ten or more employees) drive significant economic growth, create a huge number of jobs and have been identified as a potential solution to the UK’s productivity challenge.
Relatively few businesses experience the scale-up moment – less than one in 40. To address this, Smith & Williamson undertook the largest ever sentiment study of this vital business community, interviewing 500 scale-ups and over 500 firms yet to achieve their scale-up moment, charting the secrets of their success to enable more SMEs to find their own route to growth.
Just ten months before the UK is due to leave the European Union, the findings suggest high growth businesses in construction and real estate are in a bullish mood with seven out of ten (69%) of those questioned planning to take on new staff to keep pace with growth. In addition, more than half (52%) report improved financial health among their trading partners.
Scale-up businesses in construction and real estate are also optimistic about other areas of government policy agenda, with almost half (48%) believing they stand to benefit from the current infrastructure strategy and 56% believing they will be positively impacted by the recent Apprenticeship Levy, as opposed to mature real estate businesses who have largely seen it as a negative.
What sets UK scale-up businesses and their founders apart?
The study also considered what traits scale-up businesses and their founders share UK-wide. One key conclusion is that their attitude towards tech and innovation is giving them an edge. This could explain why younger entrepreneurs, raised as digital natives, are flourishing, with 42% of scale-up founders aged 34 and under.
Half (50%) of high-growth companies say technological advances have been critical to their growth, compared to just 18% of slower-growth firms. More than a third (34%) also believe that having an innovative business plan has been key to their success. This falls to a quarter (27%) among non-scale-ups, and to 21% among micro-companies, employing ten or less people.
Competitive, hungry, ready: the scale-up mindset
The research also shows that scale-ups display a greater sense of urgency than other businesses. Almost one in three (32%) reach their high-growth status in just three years, while eight in ten (84%) join the club within a decade of launching. After this, the chances of a business achieving consistent high growth fall significantly.
Jackie Oakes, scale-up lead in the Real Estate group at Smith & Williamson, said:
“It’s been fascinating to gain insight into how such successful companies think and feel. We have uncovered considerable differences between scale-ups and the rest of the business community, in both mentality and approach. But, 91% of businesses want to grow further, and I am convinced almost any of them can emulate scale-up business success – provided they have the right growth toolkit.
“Policy-makers must also play their part, by doing all they can to accommodate scale-ups and encourage their continued rate of high growth. While our findings show that the scale-up business community in construction and real estate is relatively positive about Brexit we will only truly be able to scope the business opportunity when we have further clarity on the UK’s future trading position. These high-growth firms are also very positive when it comes to apprenticeships. Perhaps this is because they place such a major focus on technology and innovation and therefore have a greater need for tech-savvy young people.”
Any business can find out if it’s a scale-up, receiving a personalised report of how it compares in relation to its competition, across sector and region, using Smith & Williamson’s new online, interactive and accessible service to help businesses benchmark here