Almost half (42%) of the scale-up businesses in construction and real estate believe that the Government’s approach to Brexit and international trade will benefit them, while 40% say it will have no impact at all.
These were just some of the findings from Dream bigger: The scale-up moment, the largest ever sentiment study of the scale-up sector. Defined as an enterprise which has grown in either headcount or revenue by 20% for three consecutive years, from a starting position of ten or more employees, scale-ups drive significant economic growth, create a huge number of jobs and have been identified as a potential solution to the UK’s productivity challenge.
Brexit: no cause for panic
Just ten months before the UK is due to leave the European Union, our research suggests high-growth businesses in construction and real estate are in a bullish mood with seven out of ten (69%) of those questioned planning to take on new staff to keep pace with growth. In addition, more than half (52%) report improved financial health among their trading partners.
Scale-up businesses in construction and real estate are also optimistic about other areas of government policy agenda, with almost half (48%) believing they stand to benefit from the current infrastructure strategy and 56% believing they will be positively impacted by the recent Apprenticeship Levy.
Room for growth
Relatively few businesses experience the scale-up moment – less than one in 40. To address this, Smith & Williamson interviewed 500 scale-ups and over 500 firms yet to achieve their scale-up moment. The culmination of this research is Dream bigger: The scale-up moment charts the secrets of scale-up success to enable more SMEs to find their own route to growth.
Our research showed that the majority of fast-growth companies in the real estate sector experienced their scale-up moment five years after launching, and that market opportunity was the individual factor that had had most impact on their growth since foundation.
However, this optimism and ability to take advantage of the opportunities that present themselves is tempered by rising concerns on how to control costs. This fear about rising costs has not had a negative impact on outlooks in the sector: 78% of scale-ups looking to borrow the same or more over the next 12 months.
Policy-makers must play their part, by doing all they can to accommodate scale-ups and encourage their continued rate of high growth. While our findings show that the scale-up business community in construction and real estate is relatively positive about Brexit we will only truly be able to scope the business opportunity when we have further clarity on the UK’s future trading position.
High-growth firms are also very positive when it comes to apprenticeships. Perhaps this is because they place such a major focus on technology and innovation and therefore have a greater need for tech-savvy young people.
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.