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Businesses need to scale-up in order to grow. Recently published, ‘The Scale-Up Report on UK Economic Growth’ by Sherry Coutu, CBE highlights the potential value that scaling-up businesses can have on the UK economy, and recommends steps towards making this a reality. According to the report, closing the scaleup gap will have the following effects:
- Short-term: Additional 238,000 jobs and £38 billion additional turnover within three years of reversing the start-up gap (Source: RBS)
- Medium-term: Possible boost of £96 billion per annum (Source: Nesta)
- Long-term: Potential of £225 billion additional Gross Value Added (GVA) and 150,000 net jobs by 2034 (Source: Deloitte)
Coutu’s report provides a list of recommendations to help UK businesses scale-up, covering six key areas:analysis on the scale-up gap closure, accessing talent, developing scale-up leadership, increasing customer sales at home and abroad, financing scale-ups and accessing infrastructure.
How businesses can Scale-Up
It is not only the economy that will benefit from a scaleup culture. Businesses also reap the benefits in terms of profit growth. The report is an in-depth analysis of what the Government should do in order to help businesses scale-up. On the other end of the spectrum, we look at steps that businesses themselves can take in order to scale-up and grow.
1. Growing internally
Businesses need to invest in the right people and – where necessary – newer equipment, whether to improve efficiency levels or to expand into new areas.
2. Growing externally
Rather than growing from within, companies can also opt to expand via partnerships or even mergers. It is important that businesses choose to work with companies that share similar aims, values and goals in order to produce – and profit from – the synergy.
3. Exploring new markets
The UK Government is off-target from its goal of £1 trillion exports by 2020. Chancellor George Osborne announced in the Autumn Statement that £45 million will be tasked to help UK exporters explore markets outside of the Eurozone, which is currently the UK’s largest export market.
Seeking support
Businesses cannot rely solely on Government support to help them scale-up; they have to be proactive in order to access the opportunities that are available. Part of being proactive involves seeking help, whether from the Government or other sources. Three key areas that are crucial when scaling-up are:
1. Funding growth
Businesses should have access to information about all of the forms of funding available to them, from traditional bank loans to more modern crowdfunding incentives.
2. Saving money
Given that scaling-up requires additional finance, businesses are under pressure to save even more money in order to fund any expansion. This involves analysing all costs, including the cost of currency transactions, if necessary.
3. Mitigating risk
Whether a business is expanding internally or externally, or branching out into new territories, it faces uncertainty and, with that, risk. In order to scale-up, it needs to assess the risks and mitigate them where possible.
Today’s economic climate is more uncertain than ever. It is increasingly important that businesses scale-up so as not to get left behind. With the right amount of proactivity and support, UK businesses have the potential to scale-up profitably, benefitting their bottom line as well as the UK economy as a whole.
To read The Scale-Up Report on UK Economic Growth in full, visit www.scaleupreport.org
To save money on your international payments or to be introduced to parties that can help you to scale-up, contact Smart Currency Business by calling us at 020 7898 0500 or emailing us at [email protected]
