Member Article

How has the 2013 Autumn Statement contributed to the growth of British SMEs?

It was reassuring to hear George Osborne is “backing British businesses all the way” in yesterday’s Autumn Statement. With the UKs forecast for growth in 2013 upgraded from 0.6% to 1.4%, the Statement is essentially optimistic.

However, growth isn’t always easy, particularly for fast growing SMEs. Getting the balance right between fast growth and long-term sustainability is a real challenge for many budding organisations. But are there certain attributes which can help to maintain a successful business? What are the key factors for success in today’s complex economic environment?

Growing Pains

In the post-recession environment of UK business, there is much talk about the entrepreneurial spirit of British business owners. David Cameron has said on more than one occasion that the future of the British economy lies with the ‘grafters’ of small businesses and that the country must support growing businesses. This has been reflected in this years’ Autumn Statement. The cap of business rates at 2% will be warmly welcomed and the introduction of paying business rates across 12 monthly instalments will continue to raise optimism amongst business owners.

But for organisations that manage to break through the barrier of initial investment and past the start-up honeymoon period, what comes next? Is fast growth for a business ever a guarantee for long term success?

The ebb and flow of success

We can certainly glean some insights by looking back at how fast growing companies have performed in the past. Certainly some sector shifts in high performing businesses over time can be justified and explained by macro-economic changes in the UK, but that is not the whole picture.

Despite the decline of the UK high street, retail remains a burgeoning sector in the UK. It is a great example of an industry which has embraced flexibility as an attribute, surviving by utilising both online and offline platforms and embracing new technologies. Whilst very small businesses and the larger high street brands are exposed to the perils of consumer confidence, it would appear that high growth mid-market businesses can exercise flexibility through independence.

Factors for success

So what happens to really successful start-ups over time, and what makes already successful businesses exceptional - what makes the best of the best? High growth businesses are not solely the product of the sectors they represent. There are certain characteristics which are constant across successful business for example, factors such as innovation, management, timing and flexibility.

Looking back at some of the highest performing companies of the last decade, certain characteristics stand out and some interesting trends emerge. For example, in the economic peak of 2006, companies with ‘timing’ and ‘management’ strengths prevail, whilst in the post-recession period, innovation is a clear characteristic of high growth businesses.

By embracing an innovative approach, SMEs can – and do – grow faster and more sustainably.

This was posted in Bdaily's Members' News section by John Bryceland .