Research from Barclaycard has found that almost six in ten (57 per cent) leaders of scale ups – defined as businesses with at least 10 employees and average annualised growth of 20 per cent or more in last three years – have experienced a moment of uncertainty when they were afraid their business would fail.
A host of challenges that come with scaling up were also revealed to be keeping the leaders of these businesses awake at night. The most pressing concern cited was maintaining employee wellbeing and satisfaction (referenced by 66 per cent), followed by finding and retaining talent (64 per cent), standing out from the competition (63 per cent) and maintaining customer service standards (63 per cent).
When tackling hurdles and building their business, more than a quarter (27 per cent) turn to their bank for advice and support; 22 per cent call on IT providers and an equal number to local business networks. Overall, the vast majority of growing companies (91 per cent) have looked to external partners to help scale their business. There remains, however, a clear gap in support with seven in ten (71 per cent) scale up business leaders calling for more help to be available to successful start ups ready to grow.
Surprisingly, 25 per cent of respondents, all of whom meet the criteria for a scale up business, don’t know or haven’t heard of the term ‘scale up’ – highlighting the need for greater discussion about the requirements of, and support available to, companies in this critical phase of the business lifecycle.
So how do business leaders know when they’re moving from start up to scale up? The top ten ‘milestone moments’ revealed by Barclaycard’s research are:
- Moving to bigger office or shop
- Experiencing a rapid increase in customers
- Launching a new website
- Developing a social media presence
- Investing in customer experience and not just products
- Starting to trade internationally
- Implementing a more reliable payments system as transaction volumes increase
- Working with a finance expert to look after the business accounts
- Hiring an HR consultant to recruit and retain the best talent
- Refreshing the look and feel of their brand, for example introducing a new logo
While scale up businesses face many common growing pains, they see themselves as the innovation engine of the UK. The majority (65 per cent) believe that they have the edge on bigger businesses in this area, due to more agile ways of working and a strong pool of talent. Almost four in ten (37 per cent) believe it’s easier for scale up businesses to ‘test and learn’, as there’s less red tape and bureaucracy required to implement new ideas, while 29 per cent think scale up businesses attract the most exciting and creative employees.
While scale ups view themselves as best-placed to innovate, doing so requires funding. More than three-quarters (77 per cent) agree that a scale up business needs to ‘invest to grow’, with, on average, 29 per cent identified as the proportion of turnover that needs to be invested annually to secure progress.
Konrad Kelling, Managing Director, Barclaycard Payment Solutions, said: “Reaching the scale up phase is an exciting moment for any business – but as our research shows, it brings new challenges as well as opportunities.
“Whether they’re looking to trade internationally, launch a new product line or update their payment technology to meet customer demand, in today’s uncertain economic environment, growing businesses should lean on their partners for advice and support. If scale ups can access the help they need to overcome the pain points of growth, they will be much better positioned to build a successful business both in the short and long-term.”
“As an entrepreneur who has scaled up and mentors scaling businesses, I identify with the growing pains revealed in Barclaycard’s research,” commented Bianca Miller-Cole, entrepreneur and author. “Getting the support you need in the early stages is vital for making your business a success, even if it’s just recognising the moment when you’re no longer a start up.
“My advice to any scaling business is not to be afraid to ask questions and always approach growth as a chance to innovate,” says Miller-Cole. “This does not just refer to your product; your website, social media presence, events, and store layout are all areas where you can test out new approaches. Ultimately, from my experience, scaling is growth for the greater good – but inevitably there will be challenges along the way.”