By Daniel Hunter
Despite challenging macro-economic conditions, there are currently 4,353 small to medium sized enterprises (SMEs) demonstrating high levels of growth across the UK, according to the latest Experian research commissioned by BGF. This is an uplift of almost 10% compared to this point last year.
These 4,353 UK companies have each demonstrated aggregate growth of at least 33 per cent in the last three years. These companies make up 17% of the overall population of 24,955 UK companies with a turnover of £2.5m - £100m.
Of the high growth companies identified, those with turnovers of between £2.5m - £10m continue to perform most strongly. 51% of the high growth segment, or 2,202 companies, had turnovers of less than £10m.
Since this Barometer was published last year, the picture is one of overall growth increase, albeit at a gentle level. It continues to show that fast growing companies can be found in a diverse range of industries and across all regions of the UK.
The BGF Growth Companies Barometer shows a higher incidence of high growth companies in almost all regions of the UK, notably Yorkshire and the West Midlands.
Similarly, almost all industry sectors showed some increase in the proportion of their high growth small and medium sized companies. Business services companies continue to be the best represented among the high growth segment, with 1,095 companies making up 25% of the group. 20% of the high growth segment, equating to 859 companies, is represented by Manufacturing; and Retail occupies 11%, with 478 high growth companies identified.
“This data is encouraging. It shows that despite all the wider challenges posed by the macro-economic climate there has been more, and ever increasing, SME growth in the UK. Good businesses are prospering across almost all regions of the UK and diverse industry sectors," Stephen Welton, CEO of BGF, said.
“However, for real economic recovery, we need these growth figures to be higher and more broadly based. We need to see heightened levels of ambition and investment among business owners.
“One of the first questions that I ask an entrepreneur is whether they have really accomplished all that that they hoped for when they started their business? What could a robust, properly financed business plan achieve over the next three, five or ten years? Could the business double its workforce or treble turnover? Could it expand out of its home region through organic or acquisitive growth and develop a national or international footprint? Could it develop its supply chain, launch new products and increase exports to new overseas markets?
“Growth comes in many different forms and so does the means to fund it. For many businesses equity finance is an option that should be seriously considered. Working capital should be funded by debt, longer-term investment by capital or equity. We need more well capitalised businesses actively planning for long-term success.
“Not enough growth capital is currently being channeled into UK SMEs. Considering the possible universe of good businesses seeking finance to support growth, this is a missed opportunity.
“This is something that we at BGF are seeking to tackle with up to £2.5bn of growth capital available for small and medium sized businesses with ambition to invest.
“But we also need fundamental cultural change. Aspiration and ambition is critical to growth. We should make no apology for it, and we need to create a culture where it is applauded and supported.
“Finding effective ways to work with the major banks, as well as alternative lenders, is going to be a crucial factor in driving economic recovery.”
Join us on