We interview Scale-up Enabler, Briony Phillips, on what a scale-up business is, why there is a focus on them and how growth-stage businesses in the West of England can benefit.
What are scale-up businesses and why is there a focus on them?
A Scale-up business is technically defined by the OECD as a business which has grown at 20% each year for the last 3 years (either in turnover or employee numbers) and had 10+ employees at the start of the observation period. My working definition is slightly more flexible though as we want to uncover some of the smaller, less visible scale-up businesses as well as those who are listed on Companies House.
Whilst the term ‘scale-up’ is relatively new, the notion that fast growing businesses should be suitably supported is not. Scale-up businesses are increasingly widely recognised as making a positive contribution to the dynamism and health of the UK economy. These businesses are generators of exports, jobs and growth in our local communities across sectors and across regions and their success can make a significant difference in terms of productivity and economic development.
So what is a typical scale-up company?
We estimate that there are c. 100 - 200 scale-up businesses in the West of England (North Somerset, South Gloucestershire, Bath and Bristol) - this number isn’t terribly specific because the data sources are limited and because the community is always growing. There isn’t really a single, typical scale-up company – they range across all industries and sectors and from 10 people to 500.
What are the challenges that exist for a typical scale-up company?
The Scale-up Institute (founded in 2014) offers some insights into the classic challenges faced by scale-up businesses. It surveys scale-ups on an annual basis and sees 5 recurrent themes: infrastructure, skills and talent, leadership capacity, markets and financial investment.
In the West of England (my territory), Scale-up founders report that these themes are also relevant, though some more than others. Of particular concern locally are leadership capacity, volume and accessibility of financial investment and availability of suitable office space on reasonable terms (infrastructure).
What is your role as a Scale-up Enabler?
As Scale-up Enabler, my goal is to ensure the West of England is a supportive place for fast growing businesses to flourish. I’ve broken this down into three main areas:
- KNOW: Explore the existing community of scale-ups and the challenges that they face. Map and build understanding of the scale-up focused assets in the region (financial and structural tools events, networks etc.)
- INVIGORATE: Identify the gaps in our scale-up ecosystem and facilitate, support and encourage the creation of initiatives that will better equip and enable scale-up businesses.
- INSPIRE: Drive greater engagement, action and leadership across the West of England through supporting conversation and storytelling.
How will you go about identifying relevant businesses in the West of England region to access these opportunities?
Identifying the businesses is one of the biggest challenges. Unfortunately, the data captured by Companies House (and other tools) is limited to those businesses who submit full (not abridged) accounts as these include headcount and turnover figures – these are the ‘visible’ scale-ups. For any company under £10M turnover, this data isn’t easily available publicly and these scale-up businesses are invisible. Consequently, my quest to discover scale-ups across sectors and across the region, is informed by word of mouth, collaborations with existing scale-up service providers. There are also some datasets which are locally curated so I’m keen to get access to these where I can.
How are you currently helping local businesses – what’s in it for them?
My work is largely at an ecosystem level, uncovering the challenges for scale-up businesses and representing their needs with a wide range of stakeholders. My plan is to release a public asset map of the region to highlight the support that is available for all. This will be launched in November this year. In the meantime, I have been connecting some business founders with specific support when there is an obvious solution, and I have started to release information about the ecosystem as I’m working as openly as I can.
There are two areas on which I am focusing my effort at the moment: infrastructure (and particularly office/workshop space) and financial investment. For both these themes, I will soon release content/information to help scale-up founders see what is available and I will run events to open up the conversation and hopefully support changes.
How is Business West helping?
Business West run a couple of valuable services for Scale-up Businesses – the Scale-up Coaching Grants and the Enterprising West of England Programme. Business West has also part funded my role as Scale-up Enabler and are helping me to build my network and design a strategy for the next 9 months which will help the region provide better for our scale-up community.
Are scale-ups purely profit-motivated?
No. A number of scale-up businesses have expressed interest in registering as B-Corps and some of those listed by Companies House are non -profit organisations and charities. There’s no reason why social enterprises can’t be scale-up businesses too - the more diverse the community of scale-ups, the better.
What are the investment opportunities for scale-up companies?
What a huge question! It rather depends how much money they are trying to raise and what appetite they have for debt, equity or capital investment. There are a growing number of angel investment groups in the West of England and successful investment from out of region Venture Capitalists and Venture Capital Trusts. I will soon share a list of the options that I have uncovered via my blog on the Engine Shed website as well as a map of the wider assets across the region.
What are the long-term aims of the project?
In the long-term we hope to see a greater proportion of scale-up businesses flourishing in the region and an ecosystem which is even easier to access and richer than it is today. We hope we will also see a number of new initiatives to support scale-up businesses such as new multi-occupancy office spaces and new programmes to drive financial investment in businesses in the region.
Based at the Engine Shed in Bristol, Scale-up Enabler, Briony Phillips, joins the team on a 1 year contract funded by Business West, Engine Shed, The University of Bristol and the West of England Local Enterprise Partnership (LEP), as part of their shared goal to identify scale-up businesses in the West of England region, to better understand their challenges and to design, facilitate and support initiatives that will make it easier for businesses to scale-up more effectively in the long term.
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