SMEs defy Brexit chaos to generate £44bn revenue growth over three years

Despite prolonged uncertainty, a high potential group of more than 13,000 SMEs in the UK have experienced combined revenue growth of £44bn over the last three years, according to new research from BGF, the UK and Ireland’s most active investor.

The research calculates growth through changes in turnover and employee size among the UK’s private companies with revenues between £3m and £150m, a category of 13,286 businesses, 83 percent of which are based outside of London.

Over the last three years to January 2019, three-quarters of these businesses (74 percent) grew their turnover, with the group achieving 15 percent combined revenue growth during this period.

Collectively, these companies currently employ over 2.5m people. Around two-thirds (65 percent) are actively hiring, with an average 1,186 jobs created every week for the past three years and accounting for one in ten jobs created in the UK.

Stephen Welton, CEO of BGF, said: “This group of businesses has made a huge contribution to the UK, both economically and through ideas and innovation, development, employment and international relationships.

“Revenue growth like this, generated in such an unpredictable landscape, is a significant indicator of activity, productivity and progress.

“Right now, these businesses face unprecedented times and, with all eyes on Brexit, the rationale for deploying more growth capital is to my mind, palpable.

“BGF is match fit to weather this storm with the investment firepower and determination to forge ahead with an enhanced committment to business. We believe in the power of business and recognise the major and genuine impact that unlocking capital to accelerate growth can have on industry, the economy and society.”

The research has been released as part of BGF’s ‘Ready for Business’ campaign, which will see BGF confidently advocate for continued growth, committing to entrepreneurs and investing in the age of uncertainty.

Stephen Welton continues: “For the first time, we’re able to see a true and accurate picture of this group of SMEs that underpin prosperity and demonstrate that, regardless of the political turmoil, we remain a nation of enterprise, with companies across Britain and Ireland delivering the extraordinary, every single day.”

County highlights include:

• Oxfordshire has the UK’s second highest combined turnover growth in the UK (22 percent) and three quarters of businesses in the county are hiring (75 percent)
• London has the UK’s highest concentration of high-potential businesses (2,249), with companies in Westminster (585), City of London (413), Lambeth (162) and Barnet (113) making up around half the numbers
• Cornwall has the largest proportion of hiring companies in the UK at 77 percent
• Ayrshire in Scotland has the UK’s second highest proportion of growing companies by turnover (84 percent) and the UK’s third highest proportion of hiring businesses (75 percent)
• Businesses in County Londonderry (Northern Ireland) boast the UK’s highest combined turnover growth since 2015 (26 percent) and the highest proportion of growing businesses (84 percent have grown their revenues in the last three years)

Mandeep Singh, co-founder of Trouva, an e-commerce platform for independent retailers, commented: “In the last three years, as a business we have only dialed up on our growth ambitions and continued to innovate, explore new markets and have now launched in Germany. We are extremely optimistic about the near future and the potential for us to serve more customers around the world, support more independent shops and help the highstreet. Despite the outcome of Brexit, it is critical that we have access to the investment to fuel our expansion plans – allowing us to employee more staff and grow.”

Flora Hamilton, Director – Financial Services at the CBI, commented: “It is critical that the UK steps up growth across the whole economy. We need to act now to build an even stronger business environment and unleash investment in our regions. BGF have already played a leading role in helping firms realise their potential. By working with these companies to support their scale-up journey, we can create jobs, lift UK productivity and promote prosperity.”

BGF’s ‘Ready for Business’ report is available to download here.