Through our longstanding relationship with Smith & Williamson, we have become increasingly familiar with the excellent work of the Scale-up Institute.

The Scale-up Institute looks at what support is needed and available across the UK for these businesses along their journey.

A recent article in Real Deals highlighted that we live in a time of exceptional business growth. This statement is supported by research indicating that the Compound Annual Growth Rate across 300,000 PE backed companies has grown by 10.5x or more.

This is balanced by the view that the growth of small businesses in the UK is lower than in many developed nations.  With the disturbing fact that a start-up’s ability to survive, let alone grow, past the first 5 years is 50/50.

What is the definition of a scale-up? 

According to the Scale-up Institute it is: “An enterprise with average annualised growth in employees or turnover greater than 20% per annum over a 3 years period and with more than 10 employees at the time of the observation period.”

The Scale-up Institute argue that the UK economy has been growing faster than any other G8 nation but that the UK lags behind the US in the extent to which companies scale – the “scale-up gap.”  The result being that these companies struggle to grow domestically and internationally and are often taken over by larger foreign firms.

They identify a number of ways in which scale-up companies can be helped on their way to growth. Including a greater opportunity to promote these organisations.

One of the most interesting for us is the point they raise about accessing talent.

One of the key inhibitors to growth for scale-ups is the ability to hire skilled people at the right stage of growth to enable these scale-up organisations to fulfil customer requirements.

This is one of the key areas where Chairmen can help – identify the skills gap and work with management to plug them.  The Chairman can help identify the right profile of person(s) to maintain the culture of the business whilst enabling the business to scale.

The challenge of growth is a very interesting one and in these uncertain times, these scale-up businesses create a much needed boost to the economy.

The Scale-up Institute Report is well worth a look.  The work they do will reap great benefits for the SME organisations we look to support and work with.