Round Table: what is driving fast-growth businesses? – Business Leader

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Issue 37

London
Corporate Finance
Chippenham
Technology
Weston-Super-Mare
Business Group
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Story by
Serena Haththotuwa
August 10, 2022
It’s no secret that UK business has been negatively impacted in recent years, with Brexit, the pandemic and the war in Ukraine all causing disruptions to the economy. Firms are now preparing to face an imminent recession, whilst tackling a skills shortage and changes in consumer behaviour. So, how are businesses continuing to grow in this climate?
To find out more about the obstacles businesses face and how they are overcoming them, we partnered with Albert Goodman to host a debate at Ascot Group HQ, near Bristol.
Chris Walford is a Partner at Albert Goodman and starts the debate with an overview of the challenges currently faced by UK businesses.
He said: “It’s been a strange couple of years. Cashflow hasn’t necessarily been the challenge. The challenge has been staff establishing skills and good teams. When factories went into lockdown over the pandemic, disruptions to supply chains were also a major challenge, and I think this will continue to be a significant struggle going forward as costs go up, because supplies continue to be in short demand. I think businesses are growing really well, but the war in Ukraine, the cost-of-living crisis, and staffing and supply shortages are all making businesses consider how to navigate through this uncertain time.”
Nathan Guest, who is a Partner at VWV, agrees that socio-economic factors will impact business growth, but an inability to retain talent could be a bigger issue.
He said: “I think that access to funding is an issue and will always be an issue. Certain areas of the market have been absolutely fine. For example, with early-stage tech and life science ventures, the venture capital funds investing in that market have been eye-watering. Investment directors are incentivised to deploy money – so you’ve got really good businesses in fast-growing markets and there is money to invest in them. In that part of the market, there isn’t too much of a problem but companies need to have access to people and be able to retain staff.
“An issue is that all of these great businesses are going out to recruit lots of people and salaries are going up. That’s a problem for companies that have raised £2m, not £20m.”
Andrew Scott, the Founder of the Ascot Group, said: “We are definitely seeing resolutions to issues that came up over the pandemic happening now. Employee retention is a massive one. We recently lost web developers that joined us in the last year because there are bigger companies that can give them a 50% increase in their salary – and we pay just above market rate.
“At the Ascot Group, we have multiple companies. So, a major challenge has been trying to scale the business when you’ve got multiple cultures and multiple operations within one group. Over the pandemic this was evident because as we were working from home, we ended up developing three or four different cultures. So, one of our challenges has been scaling three or four different companies.”
Chris Ormrod, Managing Director at CakeSmiths highlighted the importance of thinking about an exit when approaching growth.
He said: “I believe you need to ‘begin with an end in mind’. You don’t go out for a walk with friends and family without knowing where you’re going. I think ‘purpose’ is the most important thing. Whether you’re fast growth, medium growth or sluggish, you need to be very clear about the purpose of your organisation. It’s important to create a culture where people don’t want to leave and then be transparent with them. I was always very clear to my staff that we will sell the business at some point, but I’ll sell it to the best people I can find.”
Next on the agenda was the subject of the pandemic and how it has impacted the way businesses look at growth.
Co-founder and Director at CareScribe, Richard Purcell, said his business was one of the few that benefitted from the pandemic.
He explained: “In short, it’s been quite stressful. But we have grown from three to 30 over the last year. Why have we been able to do that? I think the pandemic really helped us because there was some legislation around assistive tech that came in at the time and supported us. I think everyone became much more aware of SciTech because there was a need for it, everyone was working from home, and everyone was more used to adapting. It’s generally just a question of, can you scale quickly enough, and can you get there before your competitors?”
Alan Furley, the Co-founder and CEO at ISL Talent added to the conversation about his experience of navigating the pandemic.
He said: “We’re 50 years old as a business this year, so we have been through a lot of ups and downs. When you are operating in a really challenging environment, you reflect on what’s important to you. But we focus much more on the consequences of growth rather than the objectives themselves. We used to measure the number of heads we had as our measure of success. We still focus on growth now but we focus much more on customer retention, employee retention and employee engagement. Even though these were things we were measuring before, we weren’t really putting them front and centre”.
Jack Boyd, New Partnership Manager at Cardstream also attended the event and shared his perspective on how the pandemic impacted payments.
He explained: “The pandemic did help in terms of a shift to e-commerce and digital payments, so that certainly helped. We are based in the South West of England and there are a lot of talented candidates here, but there are definitely less of them. So, we’re trying to establish a hub in Manchester where there are less tech companies and customers. For us to grow further, we need to bring in tier-one customers and compete with companies that have a turnover of hundreds of millions of pounds every year and can spend £10-20m on marketing campaigns, which we can’t. Our main challenge is figuring out how to meet people in those areas at this point.”
Ben Hoskin, COO at Regency Purchasing Group, explained how the business has suffered over recent years.
He said: “Two-to-three thirds of our turnover comes from the leisure sector, and after the pandemic, we saw this drop by 95%. Our supply chain and operations stopped because of the pandemic. We were selling PPE but didn’t want to be a pandemic-specific business, so we stuck to our guns. We beat our growth from 2019 in 2021, which was great considering we were closed for half the year. One of the challenges I see all the time is trying to keep up with yourself – there’s no point bringing in new customers if you don’t have the resources to look after them.”
A national skills gap has caused an employee-driven working economy, so will this change in the year to come?
Andrew Scott said: “Recruitment is a major issue for us. Instead of just advertising for roles, we run regular recruitment events to sell the dream. We want to expand to Manchester and London, but there are a few red flags. Florida recently announced 700 job losses in tech.
“I’m not necessarily saying the bubble has burst, but there is quite significant caution with inflation, the cost-of-living and a potential recession. That being said, we have doubled in size every two years and even through the pandemic. We didn’t put our heads in the sand and scale back.”
Clodagh Murphy, Director at Cathedral Appointments, pointed out that there could be a long-term impact of redundancies.
She said: “I recently heard about mass tech redundancies in San Francisco, which is an indication of what the sector might look like in the future. I don’t think we will see a resolution in the next six months, I think there are long-term factors to this. With remote working, people have access to far greater opportunities than they ever had pre-pandemic – I think there will be a ripple effect from this with complications around embedding cultures, productivity and employees not understanding the vision and direction of the company.”
Glyn Blaize, COO at Amdaris, said the war in Ukraine might encourage an unexpected shift.
He explained: “In the UK, everything has contracted. You wouldn’t expect someone in the middle of Ukraine to be working on a contract for someone in the UK – but now that is completely normal. We’re on this really interesting trajectory. Covid has changed the picture and the labour market has become a lot freer.
“Businesses are seeing hiring people from Ukraine as a part of their CSR and ESG strategies. They are thinking about how they can support Ukraine without giving money and a part of that is hiring talent there – so out of this horrible rubble of the war is something quite beautiful and strange.”
With a skills shortage impacting many firms across the country, we asked: how can you retain talent?
Marina Traversari, COO at Spherics, highlighted the importance of culture in retaining talent.
She said: “Culture is very important and so is bringing in the right people. We haven’t found it very difficult to attract talent. I think this is because we are a B Corp and we’re a people-led organisation. In a book called Wilful Blindness, I learnt that you increase your revenue by 80% by empowering the team that you have. They’re your company – you can’t have one person at the top making all the decisions. I think if you can differentiate yourself in the market, you will be able to attract talent.”
Furley pointed out the importance of autonomy, adding, “When I think about all the candidates I have spoken to in the last year, particularly in the last 18 months, they have really spoken about things like autonomy, mastery and purpose. It’s very important to give employees a sense of autonomy as they will feel like they’re making a tangible impact in the company.”
Lee Hambleton, Finance Manager at Griffith Foods spoke of the importance of sharing a good business story.
He commented: “We have a really great story. We are a family-owned business and we have been quite risk-averse, but that has meant we have been able to grow sustainably, meaning we have over 1,000 employees with a £1bn turnover. That’s the sort of thing we need to start selling to people because it connects people to an organisation. If I was offered more money elsewhere, I wouldn’t go because I’m attached to this story, and I really feel like I can make a difference here.”
Furley said: “If I sit down with a founder or CEO and they tell me an amazing story, sometimes that’s not obvious on their website, for example. Often, especially with start-ups, they want to get their name out there and they might be doing something really meaningful and impactful. But if we went to look at their website, they probably don’t even have their roles on there, let alone photos of their clients.”
Hoskin explained the importance of having a well-received focus amongst a team: “The point about culture is absolutely key. I think a really good way to create culture is making sure everyone knows what the focus is. For example, ‘always put the customer first’. So, if everyone has a decision to make that day, if it aligns with the focus, then you know you are doing the right thing. It’s about having a long-term vision because you might not always make the quickest buck, but you’ll have business for a long time.”
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