Converting Promising Start-Ups Into Lasting Growth
The latest Barclays and BGF Entrepreneurs Index explores the increasingly lively start-up scene that was recorded in the UK last year and evaluates a more pressing issue; how we convert these promising start-ups into lasting growth for the economy.
The financial crisis and subsequent recession acted as a significant driver for people to start their own businesses, and the government injected further impetus through measures such as the Seed Enterprise Investment Scheme (SEIS) and the Start Up Loans programme. Advances in technology and greater support from the private sector have also contributed to today’s healthy start-up landscape.
According to Companies House data, the number of active companies in the UK continued to grow between June and December 2014, rising from 3,027,622 to 3,139,630. This is part of a continuing trend we have observed since we began the Entrepreneurs Index series in 2012.
Translating start-ups into high-growth companies
When the UK’s new government is formed following May’s general election the key challenge in the entrepreneurial space will be to help translate an increasing start-up population into a greater number of high-growth businesses. Currently, we see signs that entrepreneurs and business owners are not achieving their maximum growth potential. For instance, only 4% of UK start-ups achieve £1m turnover after three years.
In the previous volume of the Entrepreneurs Index, we observed that the proportion of high-growth companies in the £2.5m to £100m revenue bracket was plateauing and, in the latest Experian figures, covering up to March 2014, there has been a slight decline in this percentage, from 23.2% to 21%. The message is clear: while the desire to start a business is becoming more prevalent in the UK, there is work to be done in getting those businesses to the next stage, delivering growth and wealth creation.
About the report
The aim of the Entrepreneurs Index series is to provide a barometer of entrepreneurial activity in the UK across sectors and regions; to understand the barriers to growth facing today’s entrepreneurial companies; and to assess the extent to which the country’s entrepreneurs are now realising wealth through their businesses.
