Scaling a business always comes with its challenges. But 2020 was different.
So how have the nearly 34,000 scaleups in the UK coped over the past 12 months?
ScaleUp Institute’s Annual Review is a key guide to the UK’s scaleup business community. It includes a comprehensive analysis that summarises the performance, growth, motivators and challenges of scaleups. It also highlights recommendations for the Government and businesses to help scaleups continue in their growth journey.
The UK is facing one of the most challenging periods in history. Companies are also battling an unprecedented backdrop of a global health pandemic. Just over half of the scaleups surveyed believe that Covid-19 and Brexit will have a negative impact on their business. But that means nearly half don’t think it will.
We were delighted to read that the overall outlook of last year’s review is promising.
- Contributions to the economy: The total number of scaleups in the UK has fallen since 2017. But the overall figure is still 25% higher than it was in 2013. 5.7 million SMEs generate £2trn for the UK economy, 33,860 scale-ups contribute an impressive 50% of this total. Scaleups continue to be more productive than other UK businesses across almost every sector of the economy.
- Access to finance: The UK urgently needs more equity capital to drive future growth. Four out of ten scaleup leaders surveyed by the ScaleUp Institute reported that they currently do not have enough capital to meet their growth ambitions. 80% of scaleups are planning to grow in 2021 but barriers to finance remains a concern for 47%. Ongoing financial support packages continue to provide much-needed relief.
- Access to talent: Confidence amongst scaleups is fragile. Interestingly, 59% of scaleups view access to the talent they can hire as a vitally important factor in their business growth. Attracting and retaining talent is an ongoing challenge. The impact of the new Immigration Rules in January 2021 and IR35 Rules in April 2021 are yet to be seen.
- Future growth: Five out of ten businesses responding to the ScaleUp Survey expect to grow beyond 20% in 2021 and one in four beyond 50%. Despite concerns over the Covid-19 pandemic impact and the testing path of Brexit, 70% of scaleups expect to grow by turnover and 2/3 expect to grow by employment.
- Pursuing opportunities: 6 in 10 scaleups plan to pursue international opportunities in 2021. Unfortunately not enough scaleups are getting the opportunities to supply large corporates or work with the Government. The development of local scaleup programmes and the expansion of ones the ScaleUp Institute has endorsed are helping. This includes ELITE, the London Stock Exchange Group’s international business support and capital raising programme for ambitious and fast growing companies. Bird & Bird became an ELITE global partner in 2018, proudly providing seminars, mentoring companies and hosting events to scaleups across the world.
Key takeaway: There’s no time for complacency during a global health pandemic and coming to terms with the aftermath of Brexit. However the outlook isn’t all doom and gloom. UK scaleups remain ambitious. Businesses need to be nurtured through their journeys.