Five per cent of small businesses in the East Midlands play an extraordinary role in boosting the local economy, according to a new report by Santander Corporate Banking.
These 383 fast growth, or Growth Champion, businesses have a significantly higher economic impact than the rest of the region’s small and medium-sized businesses (SME). Additionally, these companies proved to be exceptionally resilient during the recent recession creating 9,545 jobs during the difficult economic period of 2007 – 2010.
The Breakthrough Growth Champions Report, which examined growth patterns among businesses with turnovers between £500,000 and £10,000,000, revealed Growth Champions are found across a wide range of industry sectors. The highest concentrations were found in sectors such as Social Work (14.7 per cent), Complementary Medicine, such as homeopathy and physiotherapy, (11.4 per cent), and Architectural and Engineering activities (7.7 per cent).
Deeper analysis identified a number of characteristics commonly held by Growth Champions. These include strong teamwork and relationships; youthful leadership; high levels of ambition; directors with a history of entrepreneurial success; and a proactive approach to cash and credit management.
While success and failure depends on a number of external factors, comparing these characteristics among other existing businesses can indicate possible Future Stars – businesses with a higher probability of achieving significant and sustained growth in net worth, sales and employment – of which there are 192 currently in the East Midlands.
Nick Pulley, Regional Director of Santander Corporate Banking in the East Midlands, said: “This research shows a small group of businesses in the East Midlands make an extraordinary contribution to the local economy. These Growth Champions demonstrate a fantastic ability to excel against the backdrop of difficult trading circumstances, delivering significant growth in both employment and net worth.
“Contrary to popular thinking, these champion businesses operate across a wide range of industry sectors proving that fast growth is not confined to the technology industry.
“Banks have a responsibility to support businesses to accelerate growth at all stages of their lifecycle. Using the common characteristics exhibited by Growth Champions, we can identify the fast-growth businesses of the future and provide the support they need to help them fulfil their potential.”
The Breakthrough Growth Champions Report – understanding the engines of economic growth was commissioned by Santander to explore how the credit crunch and resulting recession impacted small and medium sized businesses in the SME sector. Using this research, Santander designed its Breakthrough programme to specifically support these companies in the early stages of their growth cycle and help accelerate their growth trajectory.