Enterprise Index: H1 2018 Business leaders: kings of confidence

The Smith & Williamson Enterprise Index H1 highlights the importance of an optimistic outlook for businesses looking to scale up.

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Nick Travis
Published: 27 Nov 2018 Updated: 13 Jun 2022

Through our Enterprise Index, Smith & Williamson has been charting the confidence of business leaders for over five years. We have expanded that research to form the basis of this report but kept the core monitoring questions, enabling us to assess the confidence levels of the UK business community and get to the heart of the key issues.

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Motivation in business is essential but achieving goals also requires huge amounts of resilience. Our research confirmed this, with scale-up companies found to be significantly more optimistic about the future than their slower-growth counterparts. It is clear that this positive outlook serves them well in their day-to-day operations, enabling a can-do culture.

Despite Brexit, the latest Enterprise Index rose to highs not seen since the end of 2016. Confidence rose on the back of a positive worldwide economic environment, a slightly less uncertain political environment and a relatively benign tax environment, with falling corporate tax rates. The Chancellor’s decision to limit major tax changes to one showpiece Budget a year has probably been beneficial.

Our research indicates that optimism is on the rise generally. Among the scale-up community, an overwhelming 72% expect economic growth to gather pace in the coming 12 months, while three quarters (74%) also see their business prospects improving over the same period.

However, there were striking differences between scale-up businesses and those who had not achieved their scale-up moment. When non-scale-up leaders were asked the same questions, just two in five (42%) believed the economic climate would improve, while a similar proportion (43%) saw their business prospects improving.

Scale-up businesses have an outlook and a momentum that carry them through. In addition, our research indicates that high-growth businesses are only one third as likely to be hampered by caution or inertia, pursuing their goals irrespective of the external environment.

The bullish sentiment of scale-ups also seems to apply to two of the biggest business issues of the day: Brexit and GDPR. We found that scale-ups were three times as likely as non-scale-ups (37% vs 12%) to think that the UK’s current Government policy would have a positive effect on their business, and almost three times as likely (38% vs 15%) to believe that new regulation would benefit them.

Although these two issues focus on entirely different areas, they have both been identified by scale-ups as opportunities rather than causes for concern. For aspiring scale-up businesses, this crucial difference in outlook may be all that is stopping them from taking the first step.

How easy is it to build a business in the UK?

“The UK is a great place to start and grow a business. We have been through an entrepreneurial revolution in recent years. People want to have purpose, make a difference and determine their own futures and, in the UK, they can. A lot of younger people now prefer the idea of going it alone.

Once they’ve made the decision to start, there is a plethora of support groups, tax reliefs, co-working spaces and technology to enable them to move fast and cheaply. There are clubs and networks, advisers and mentors. There is access to finance through peer2peer finance and crowdfunding. There is a well-developed venture capital (VC) and private equity market and the world’s leading publicly quoted junior market in AIM. The UK attracts large amounts of investment and will continue to do so, irrespective of Brexit.”

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.


This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.