MSBs are the future of sustainable economic prosperity in the UK
Inspiration Being already sizeable enterprises, each Medium Sized Business (MSB) has proven its business concept and many are poised to become global leaders in their field.
Year by year, the UK is becoming more entrepreneurial. Business creation has rocketed since the days of recession with around one million more enterprises operating now than just five years ago. Our willingness to start-up and take calculated risks has allowed the recovery to take hold and has put the economy on a strong footing going into 2016.
We need our existing businesses to embrace this entrepreneurial spirit. In particular we need to get the most from the medium sized businesses (MSBs) who make a huge contribution to our economy and are bursting with potential. These firms make up less than two percent of the total business population but produce nearly a quarter of all sales in our economy. Being already sizeable enterprises, each MSB has proven its business concept and many are poised to become global leaders in their field.
How can this potential be realised? Working with our members, the CBI has identified ‘Three Cs’ that are fundamental to MSBs taking the next step.
First, building confidence is essential. Strange as it may seem, there are mid-market firms out there who lack ambition and worry about taking further risks. For this group, the pursuit of further growth is rarely a ‘nothing to lose’ situation.
To encourage these companies we – that is the CBI, the Government, and the wider business community – must do more to champion them, shouting about the success stories like Turner and Townsend, a Leeds-based infrastructure advisory firm that has grown its international sales by over £50 million in just two years. Busuu, the online language-learning business which has grown to over 55 million users in just seven years, is another example.
The second ‘C’ stands for capabilities, recognising that a growing business must adapt continuously and bring in the right skills at the right time. MSBs are often in transition, moving from small companies with informal processes where the boss knows everyone’s name to complex, multi-layered organisations that have to work hard to maintain a shared vision and company culture.
Expanding networks and learning from peers can help business leaders deal with the challenges arising as their business changes. That is why the CBI has set up its M-Club programme specifically for MSBs to share experiences and receive expert training.
And the third ‘C’ refers to capital. No business can grow without it. In the wake of the financial crisis we must do more to ensure that long-term growth capital is available to support the significant investments that have a game-changing impact on MSBs’ growth. That is why the CBI has recommended the introduction of a new incentive called a Long Term Lending Trust (LTLT) which would provide tax incentives for individual savers investing in trusts.
The CBI continues to champion MSBs, which form the backbone of the UK’s economy. On Monday 30 November, we will convene our national MSB Summit, bringing together some of the UK’s fastest growing businesses to explore how they can continue to fuel our economy. Their track record is strong, confidence is high and the CBI will continue to rally round them to ensure they can achieve all that they promise.