26 entrepreneurs Plugged into the local scene
The profile of smaller businesses is higher than ever – thanks to a combination of Dragons’ Den and increased government and media interest in smaller firms. But in a sluggish economy with increased competition, securing a foothold and growing in a consistent and sustainable way is by no means easy. Access to finance has become more difficult, while customers and suppliers are less likely to extend terms
The importance of SMEs to the UK economy is well established. Smaller businesses account for around 48% of the economic activity in the private sector, employ 60% of the UK workforce, and play a central role in driving innovation and high-value development. Clearly, support for SMEs is critical to the health of the UK economy.
It’s with that in mind that Santander set up the Breakthrough programme, designed to provide a range of services, support and advice to smaller businesses. The programme is aimed at businesses that have advanced well beyond the start-up stage to achieve a turnover of between £500,000 and £10 million per annum while posting growth of 20% or more in turnover, profit or employment. However, despite demonstrating great performance, many of these businesses sit firmly in a ’funding gap’.
Headed up by former Gateway to London chief executive John Williams, Breakthrough has at its heart the commitment from Santander to invest £200m in fast-growth SMEs; and it is backing that up with a support network of experts and advisers to stand alongside these “growth champions“ as their journey continues.
Williams believes these businesses need help. “We are targeting the £500k-£10m turnover band. Below £500,000 turnover, business angels will generally be interested in providing support. Above £10m, private equity companies or venture capitalists will look to explore opportunities for investment. So there is a market segment of companies that are potentially the fastest-growing in the country, yet whose growth is being constrained by this funding gap.
“The average level of finance we’ll provide will probably be around £1m, so we aim to help at least 200 established fast-growth SMEs to achieve their potential.“
In practical terms, that means working with SMEs to provide support in a range of ways.
They include holding Breakthrough Live, a series of events to bring together
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usually stay with you. To maintain that level of service, we want to expand the IT side of the business.
“So our growth plans may well involve looking for finance to acquire a managed- IT business, or building it in-house, so that will require investment.“
Peach is a new Santander client, but already Scott-Healey is enthused about some of the possibilities offered by participating in the Breakthrough programme. “Lots of banks talk about lending to smaller businesses but few follow through on that, which is strange because this is such an exciting sector,“ he says.
“So I want to continue this growth, I need support, and I don’t want to give away equity at this stage, so the Breakthrough fund seems like a really good idea.“
Alex Fuller, regional director
entrepreneurs, finance providers and professional service firms to network and develop relationships; the internship programme, designed to match the cream of recent graduates with the growing businesses that need their skills and drive with subsidised three-month placements; and master classes that offer entrepreneurs the chance to visit iconic businesses (such as Google) and absorb the lessons of success.
Underpinning all this is the commitment, through the growth capital fund, to provide mezzanine finance to eligible growth companies.
Breakthrough has already made a significant impact in the Solent region. As founder and MD of Peach Telecom, Darren Scott-Healey is well placed to discuss the pressures facing growing businesses. He sold his first business and founded Peach in 2006, and has since featured on the Sunday Times TechTrack 100, and also the Deloitte Fast 50.
Peach works with customers to provide mobile and fixed telecoms solutions. Scott–Healey says the next phase of development will focus on expanding the range of products and services they can offer our customers, “because in this industry customer service is critical.
If you look after the customer then they will THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – NOVEMBER 2012
And that support extends beyond finance. “I’ve been in this industry a long time, but I’ve never really thought about my bank as being helpful. But since getting involved in Breakthrough, we have already been put in touch with potential clients that might be interested in working with us. That network is so useful – contacts can be a massive help. We’re also looking at targets to acquire, and as the bank is plugged into the local scene, we’ve already had a few leads.“
Alex Fuller, regional director for Solent, adds: “We need more businesses like Peach Telecom to help to strengthen our economy, and that is exactly why we developed the Breakthrough programme to ensure they get the support and advice required to meet their growth aspirations and succeed.“
To start working with Santander contact your local relationship team.
Details:
Relationship team 023-8083-1995
www.santandercb.co.uk
Breakthrough programme
www.santanderbreakthrough.co.uk
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