It’s time for big businesses to move over, mid-sized firms are leading the way when it comes to economic growth in the UK. Ambitious small businesses are taking steps to seize opportunities and put their expansion plans into action, taking optimistic outlook in spite of Brexit gloom from their larger counterparts.
A report published in 2016 forecasting to 2020 is proving true in its positive projections for the mid-market. While large businesses are making headlines with the pessimistic view of UK opportunities amid Brexit, medium sized businesses are taking a much more bullish approach. Now mid-way through the projections, reviewing them shows just how far medium sized businesses could go.
Between 2015 and 2020, the mid-market contribution to GDP was expected to increase by £50 billion, an 18% increase. With small business contribution expected to decline, it clearly indicates that more small firms are making the jump to medium sized business to match their ambitions. The eagerness to explore exporting, even with Brexit looming, it underscored in the findings too. Fast growth companies dubbed ‘gazelles’, those that have exhibited a turnover growth greater than 10% every year for at least five years with a turnover of at least £30 million, are alone expected to account for £1 in every £5 of exports.
Boosting regions and shifting away from London
One of the interesting things the report highlighted was how the growth of the medium sized business market would change the UK economy in terms of where businesses are based. While large companies typically have a London focus and the government has a vision of creating a northern powerhouse, SMEs are far more likely to work in diverse location, a positive for many local economies.
For example, while large businesses were expected to decline in their share of value contribution across all regions except the capital in the four-year period, the mid-market expected nationwide growth with a decline seen only in the North East. For communities, workers, and the wider economy, a shift away from London represents a positive change.
Challenges to overcome
While the report and sentiment from medium sized businesses have been positive, there have been challenges to overcome if firms with big plans are to reach their full potential. The report called for tax cuts and a plan to support mid-sized businesses in accessing the highly skilled workers they needed, making the difference between rapid economic growth and stagnation.
Another key area where the report called for change was the current access to finance. SMEs have historically found it notoriously difficult to access the lines of credit from traditional lenders they need to realise their ambition, even when they have opportunities that will secure the further growth of the business. Here, the alternative lending market has stepped up to offer a range of flexible solutions that match the needs of ambitious companies. Here at GIC Capital, we pride ourselves on working with SMEs to secure their future.
It’s time for big businesses to move over, mid-sized firms are leading the way when it comes to economic growth in the UK. Ambitious small businesses are taking steps to seize opportunities and put their expansion plans into action, taking optimistic outlook in spite of Brexit gloom from their larger counterparts.