More than three-quarters of UK businesses reported growth last year, but many are facing problems caused by that expansion—“growing pains” which will limit future gains.
A survey of 200 UK business leaders found that just 20% are “highly positive” about meeting future growth targets. The rest are more sceptical, despite recent successful expansions and ambitious plans, and need to overhaul their business if they are to grow further.
The survey, from eProcurement company Wax Digital, examines the hopes and fears of mid-sized companies, those with annual turnovers of £50 million to £250 million.
Three-quarters (74%) reported they had grown over the last three years, with 55% becoming more ambitious about their growth over the last two. Just 2% of companies said they weren’t looking to expand.
92% have strategies for facilitating expansion, beyond relying on ‘organic’ growth. Those include adopting new channels to market (43%), expanding their product and service range (38%), selling in different geographies (28%) and innovating new products and services (24%).
17% are also pursuing growth by acquiring other firms, 9% are seeking investment and 8% are exploring digital markets.
However, 80% of these firms are facing up to 15 different growing pains, which will restrict their expansion.
39% of respondents cited skills and talent shortages as a major factor imperilling their growth, followed closely by global political disruption (37%) and Brexit (36%). Other challenges including the inability to attract investors, inefficient supply chains and uncontrolled costs and spending.
Paul Ellis, Managing Director at Wax Digital, said: “It’s a critical time for Britain’s business engine room amid Brexit and other disruptive forces, but its performance is being throttled by the fact that these companies often end up running before they can walk.
“A symptom of rapid expansion is that internal systems and processes and external relationships are not designed to keep pace with change. Whether that’s being able to appeal to investors, optimising your supply base and production or knowing what cash you’ve got to work with, it’s vital to get the right scalable foundations in place.”
