This week I have asked Charlotte Alexander in our company and commercial team to talk about upscaling. Her report below is really interesting. Looks like these could be really important for the growth of the north east economy.
Charlotte writes:
Following on from Jane’s blog last week about buzz words of the moment, another one we here in the Corporate and Commercial team have come across is ‘Upscaling’ or ‘Scale Ups’.
Scale ups are high growth small businesses. Different to start-ups and ‘lifestyle businesses’ where the main aim is to set up and run to sustain a specific level of income and no more, upscaling businesses want to grow fast and profitably.
According to the Scale Up Institute, for a business to qualify as a scale up, it will usually be achieving 20% annual employee or turnover growth a year, over a three year period. It will usually have at least 10 employees and its turnover will be between £1 million and £20 million.
Statistics provided by the Scale Up Institute, highlight why scale ups are being touted as the real drivers of economic activity, providing more gross value to the economy than start-ups. For example scale ups create 3 times as many jobs as FTSE 100 companies, this equates to around 4,500 jobs being created per week.
There are 11,575 scale ups in the UK, with 8,923 in England alone. The North East accounts for 600 of these upscaling businesses.
Within a 5 mile radius of Jacksons head office in Stockton, there is a staggering 20 scale up businesses, employing 3 thousand individuals and amassing a combined turnover of £412 million pounds! We can proudly say that Jacksons have worked with or supported nearly a third of these local scale-up businesses.
Whilst scale ups are gaining much more attention, there are still challenges. According to the North East Local Enterprise Partnership (LEP), scale ups are facing the three ‘Cs’:
- Cash
- Customers
- Capacity
The Corporate and Commercial team here at Jacksons can help:
Fast growing businesses eat cash, therefore we can advise on a whole raft of transactions relating to corporate financing to help keep the business growing, including:
- raising capital – allotting shares, shareholder agreements etc
- mergers and/or acquisitions,
- refinancing and restructuring the business
- raising and restructuring debt
- streamlining debt recovery
Breaking into new markets and expanding customer bases, is perhaps one of the biggest challenges facing the scale up business. We can advise on a number of practical arrangements and techniques to make sure your business continues to flourish:
- agency/franchise agreements
- terms and conditions relating to goods and services- supplied and purchased
- setting up an online presence and the legal requirements – distance selling under the Consumer Rights Act, website terms of use, cookie and data policies etc
- outsourcing agreements
- development and protection of IPR- trademarks/copyright
Employees are the backbone of the upscaling business. Without workforce capacity, growth and profitability will be stifled. Is your company set up to retain and develop your staff? We can provide information on workplace incentives:
- Employment contracts
- Salary sacrifice benefits
- Employee share schemes
- Enterprise Management Incentives
As keen supporters of the Government’s Northern Powerhouse agenda, Jacksons are eager to support local businesses in whatever guise they take. We recognise that a one size fits all approach doesn’t serve the local businesses appropriately and definitely won’t cut the mustard with the budding and established entrepreneurs who are driving the region forward.
Please don’t hesitate to contact the Corporate and Commercial team for more information or help and advice.
