Opinions

A Short Manifesto For 'Scale-Up' Businesses

Start-ups are all the rage right now, but what about the bracket of bigger SMEs between the fledglings and corporates? It's time we gave Britain's Mittelstadt a leg-up.

Share this article

Share this article

Start-ups are all the rage right now, but what about the bracket of bigger SMEs between the fledglings and corporates? It's time we gave Britain's Mittelstadt a leg-up.

Opinions

A Short Manifesto For 'Scale-Up' Businesses

Start-ups are all the rage right now, but what about the bracket of bigger SMEs between the fledglings and corporates? It's time we gave Britain's Mittelstadt a leg-up.

Share this article

As soon as the election gun fired you couldn’t help but notice the Start-up Britain headlines. Manifestoes geared to galvanising our entrepreneurial spirit. As a founding member of a start-up business, I can’t help but be excited by the intention.

In 2005 our company, inniAccounts, was actively seeking to take advantage of everything start-up Britain had to offer. From the tax breaks through to the now defunct Business Link and all the networking events. We used it all to get our business off the ground, and it has made us the business we are today.

We are a success story, part of the growing army of knowledge workers and technology innovators, manufacturers and exporters, artisan crafters and food purveyors. We are ambitious, hard-working and we turn dreams into profit.

It’s exactly what we want as entrepreneurs. We wanted people to buy our accounting software, we wanted to be an employer of qualified accountants and software developers, we wanted to be a contributor to our local economy. We achieved our goals.

But now, like so many businesses we are faced with a new challenge. How to move from the organic growth we’ve cultivated to a far more ambitious trajectory. We want to scale-up.

Boosting Britain's Mittelstadt

I know we’re not alone, yet sometimes I feel like we are in no man’s land. Too old to be a start-up, too small to be a corporate. When I look at the manifestos I think it commendable that there is a drive to invest in helping people strike out on their own.

But I bet if you asked business owners what they want, they’d say greater recognition that start-ups will become scale-ups and that policy needs to fuel their ambition too. So I’d like to put forward a mini-manifesto on behalf of scale-up Britain. Our options for growth revolve around skilled people, money and infrastructure. I’ll start with people.

"Help to Grow is a step in the right direction. Let’s see it launch for good. Furthermore, extending start-ups schemes would be a boon"

We decided to base our business in Derby, yes, Derby. In 2013, Derby was named as a leader in hi-tech employment with four times the national average of techies, and double that of leading cities like Cambridge, Bristol and Reading. Its location also affords us a big and commutable catchment area for the non-tech employees who are vital for our success.

It really has served us well. Our model for growth is focused on cultivating qualified accountants to provide the expertise our clients expect. However, there is a gap.

Scale-up policy #1: Give young people an alternative

School leavers who have the skills and aptitude to be successful don’t consider training in a professional field because the options they are mostly presented with are university or skilled apprenticeships.

If they can afford university, then that’s the route our likely candidates will take. It means our recruitment pool shrinks. We’ve also found many young people are invariably ill-equipped to transition from school to the workplace. It’s disheartening but true.

I believe 'scale-up Britain' would say it’s time to address this by building relationships between the education sector and the professional services scale-ups to help young people understand the options and get ‘workplace ready’.

UK students

The UK needs better links between medium businesses and talented students

But more than this I think we need to enthuse young people, and show them that joining a small business from school is a good thing to do.

Before inniAccounts I lived in China. While on my travels I met young people from America who were in awe of my start-up plans. They wanted to be entrepreneurs and creators of a start-up. It was not an alien ambition to them.

I’d like to see more of that in the UK. Our young people absolutely have the potential. In fact I know they do from meeting undergraduates at Nottingham University’s career fair.

The university has an exemplary approach to supporting students into careers, inviting a cross section of employers to attend, not just the blue chips. I’m sure it’s a model that could translate to schools and colleges.

Stronger links between scale-ups and education could invigorate the appetite for joining small businesses. We’ve now started to look at how we could contribute to such initiatives ourselves.

Scale-up policy #2: Extend funding, grants and National Insurance holidays

When we look at our business strategy it’s evident we will need to invest in technology, research and application design. Most businesses within the first 10 years reach the same cross roads; be it a need for technology, R&D, large-scale marketing, or manufacturing equipment.

Our model involves reinvesting in our business. We’ve looked at borrowing from the bank but the terms that are linked to it are not for us. We don’t want to be ruled by a ‘stick’.

We could go down the VC route. But I fear, the very foundations of our success would be jeopardised – we’d become a project in ‘leaner and meaner’. And we don’t think peer-lending is right either. It’s too risky at this stage.

So what would help? Access to funding from a body that understands our position to sustain ownership, and appreciates that investing in scale-ups benefits the wider economy.

The Help to Grow pilot is a step in the right direction. Let’s see it launch for good. Furthermore, extending start-ups schemes would be a boon. If scale-ups could take a full National Insurance holiday just as we could when we were in our infancy, we’d free up the capital that would propel us on to new heights.

Scale-up policy #3: Establish networks of support that create flourishing scale-ups

There’s lots of talk about the necessity of transportation and communications links. Agreed. It’s a hygiene factor for economic growth. But Sherry Coutu’s recent study highlighted that scale-ups not only need the physical infrastructure, they also need the network of support and mentoring that can help them move up a gear. I couldn’t agree more. The business and emotional acumen of someone who has gone before you would be invaluable to scale-ups.

And that’s the key, it’s about experience and assistance from people who get your business, in our case the blend of tech with accounting, through to those who can genuinely help with the elements that aren’t part of your core expertise.

Seeking out the right people can be so difficult, and we’ve made costly mistakes trying to find them. Structured initiatives with a chain of networking support, made up of that fundamental pool of experienced expertise would help to do this, especially if they go beyond the big cities.

So there you have it. Three reasonably big asks. Mostly common sense. I’m not naive enough to think that we should wait for this help to come to us. Far from it. I know we need to get out there too.

But a focused effort on the things that I can’t influence, the biggest being funding and structured mentoring, would help so many businesses expand and fly the ‘made in Britain’ flag for decades to come.

Related Articles
Get news to your inbox

A Short Manifesto For 'Scale-Up' Businesses

Share this article