Medium sized businesses not getting enough support

Research conducted by Barclays and Business Growth Fund has found that there was a growth of 3.9% new business start-ups in the first 6 months of the year. However, the research has not found the same growth in the number of small enterprises expanding into medium sized companies.

Support for entrepreneurs and start-up businesses is strong with a large amount of finance providers focusing their efforts on small companies that need cash injections to help them begin trading.

With failure rates of 1 in 2 it isn’t surprising that the UK isn’t seeing an increase in the number of medium sized enterprises however changes need to be made to continue the high level of support businesses receive when they are just beginning.

Self employment is now at its highest level in the past 40 years, SMEs and the self-employed are responsible for 49.8% of the UK’s economy.

There are numerous reasons for the decreasing number of small businesses expanding, for example it could be due to lack of management knowledge or experience. High quality management skills may not be needed during the first year of a company with few employees however as a business begins to grow lack of management experience could cause issues.

A lot of SMEs are nervous about international expansion, they are unwilling to explore other markets over fears of failure however this is a promising way to develop a business. An obvious reason for a business failing is lack of funding however this could also cover equity capital, not just traditional loans.

There have already been some changes to help the development on medium sized businesses, Trade and Industry are working to help medium sized businesses break into international markets, showing them that it could be a profitable way for them to work.

Business Growth Fund are also investing in minority equity stakes in companies all around the UK, this will provide them with much needed funding to help them grow.

“We need to create that aspirational society where people are willing to become entrepreneurs, not just because they think it’s attractive to form a start-up, but because they have the longer term aspiration to forge a company of great scale.” – Richard Heggie, Barclays Wealth and Investment Management commented on the changes that need to made.

MCC are small and medium sized business accountants, for more information on the services we offer do not hesitate to contact us by calling us on 0161 707 1500.



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