Report by British Chambers of Commerce and Business Stream examines UK firms’ attitudes to growth
Britain’s businesses have their sights set on growth, but many lack the plans for achieving their expansion ambitions, according to a new report by the British Chambers of Commerce and Business Stream.
The survey of 400 business leaders across 20 accredited chambers was commissioned by one of the UK’s largest non-domestic water retailers, Business Stream, to examine companies’ attitudes towards growth and the common denominators underpinning those. The findings are unveiled in a new report –Beyond Bold: Strategies for Growth – launched today (14 June) at an event hosted by Birmingham Chamber of Commerce.
The report highlights a healthy appetite for growth within Britain’s boardrooms, with nine in ten (93%) leaders looking to grow their businesses over the next year, and slightly less (86%) planning to do so by entering a new market or territory.
However, despite ambitious growth aspirations, many businesses have not invested in planning for expansion, with the findings revealing that less than half (46%) of companies have produced a formal written strategy.
For the vast majority of businesses, an increase in profit was the biggest driver to seek out new opportunities, with three quarters (74%) of firms stating that this would likely lead them to develop in new markets. Slightly fewer (67%) would use increased sales revenue as the trigger for seeking out new markets while roughly the same number (63%) would look to take advantage of an increase in market share to grow their business.
When it comes to the attributes required for growth, a clear majority of businesses believe that they take an entrepreneurial approach, with 66% agreeing that they regularly take risks and go beyond their comfort zones.
James Cardwell-Moore, Commercial Director at Business Stream said: “Despite operating within a tough economic climate, both at home and overseas, it seems that Britain’s businesses are more ambitious than ever when it comes to spreading their wings and seeking growth. While this ambition should be nurtured, there does appear however to be a disconnect between growth ambitions and a willingness to invest time in planning to achieve those goals. Our previous research identified that having a bold mentality was important for entering new markets but the right attitude is not enough in itself. Having a growth strategy is essential for mapping out the path to success, especially in new markets or geographies where there are likely to be unknown risks and challenges that need to be anticipated.”
Nora Senior, President of the British Chambers of Commerce, added: “As we have highlighted several times recently, the health of UK plc is going to depend increasingly on our export performance. The ongoing reliance on debt and consumer spending is not sustainable. While we can be reassured that the SME sector has the ambition, every business and organisation with an interest in the state of our economy is going to have to put increased effort into facilitating a major shift towards exports, especially in innovation sectors.”
Other key findings include:
- Businesses that described themselves as being in a growth phase are more likely to have a strategy in place (55% compared with 33% for ‘established’ firms)
- Manufacturers are less likely to have a written plan than service companies (40% compared with 50%)
- 51% agreed that their business was a market leader in regard to technological change
- 93% of firms have ambitions to grow sales within their existing markets, with 86% seeking to expand within a new client base and/or geographical territory in the next 12 months
- 33% of firms have sold into a market over the past year that is significantly beyond their traditional customer base
- Increase in profit, rather than revenue or market share, was the primary driver of companies seeking new opportunities
- Direct sales is the dominant preferred channel for achieving growth (70%) compared with third-party distribution (13%) or mergers and acquisitions (9%)
The report also includes a 10-step plan to help businesses achieve their growth ambitions, focussing on detailed research and preparation, goal-setting and strategic planning, involving staff in the process and making best use of technology.
The research is a follow-up to a study carried out by Business Stream in 2015 which found that only a fifth of British businesses believe they operate ‘boldly’.