roundtable
Edmunds felt the level of financial knowledge and business awareness within banks provided to small business clients was not good enough. “In the past 12-15 years the quality of advice and support has disappeared from the marketplace. You almost end up coaching them on what they should ask you.”
Banks do need to fully understand customers’ requirements in order to provide adequate finance, Boswell agreed. Bank finance wasn’t always right for an early stage or scale-up business. “There is an education piece needed about today’s funding market and it’s probably incumbent upon professional organisations to say more about what’s out there.”
Evans noted that new financial initiatives are often not adequately supported by investment personnel with knowledge of the business sectors involved. However, he welcomed market interventions such as the Government’s export credit guarantee scheme, and new innovation loans. “I hesitate to say money is easily available. It is always tough.”
Franklin exampled an alternative funder who provided “a very innovative package that was much better aligned to what we were trying to achieve. Everything was completed within 12 weeks, which was really quite refreshing.”
Atkinson suggested regular research and testing of financial market options, just as businesses would with other service or product providers. “Don’t be scared of trying something different.”
Sanger: “My pet hate is that too many young entrepreneurs see funding as the symbol of success. It isn’t, it’s just the start of a possibly successful journey.”
Don’t try to run before you can walk
Boswell: Cash control can be a major problem for scale-ups. “There have been £5 million turnover scale-ups go out of business for the want of £15,000 cash to pay HMRC.”
Sanger: “Entrepreneurs who tell you that everything they’ve done has been a great success are either one in a billion or liars. My failing was that I wanted to grow too quickly in order to scale-up Rollover to be a £100m turnover plc, far bigger than the branded food wholesaler we were in 1999. I ploughed on relentlessly opening retail kiosks, chasing faster growth, not realising soon enough that opening our own fast food kiosks wasn’t a workable strategy and wasn’t as profitable as expanding our wholesale operation.”
Very few businesses today are unaffected by technology, highlighted Freeman. Technology makes it cost-effective and quicker to scale-up or down. These days IT is the basis of a cost-effective operation and good service. And your customers increasingly expect you to have digital offerings as well.
THE BUSINESS MAGAZINE – JANUARY/FEBRUARY 2018
Atkinson noted that finding appropriate tech skillsets to enable technology to help scale your business was a big challenge.
Evans mentioned the global nature of technology. “It probably doesn’t make sense to scale-up a business without trading internationally.” But many small businesses fail because they underestimate the capital required to scale-up international sales and deployment.
Atkinson: “It’s a schoolboy error really. The whole point of going to get scale-up funding is that it forces you to do a realistic financial proposal about what you actually need to succeed.”
Evans: "Many of our potentially great tech companies try to enter the US market, fail, retrench, get bought by a US corporate and are then plugged into the US sales channel. The Americans are better than us at scaling and until we learn lessons, things won’t change.
“R&D is turning money into know-how; innovation is turning know-how into money. The UK has a great science base but needs to focus more on commercialisation of our innovation.”
Best scale-up lessons learned
Sanger: “Lead, but take the troops with you. M&A is much quicker but it can be very difficult and also requires capital, whereas organic growth is slower but is probably easier.”
Edmunds: “Don’t get too drawn in. Take enough time out to reflect on what’s actually going on in the business.”
Freeman: “We have fundamentally different businesses around the UK, let alone the world. Here in the Thames Valley is an economic bubble unlike many other parts of the country. Be careful not to generalise.”
Franklin: “If you decide to scale-up, commit to it – there’s no going back.”
Evans: “It’s all about sales. Unless you have the right culture, ability to delegate, authority to make sales decisions, and long-term salesforce investment, then it’s probably not going to work.”
Dunne: “Never assume that funding is available until the credit team has said so.”
Atkinson: “Be realistic with potential sales figures when seeking funding. If you can’t sell enough, the rest of the exercise is a waste of time.”
Sikorski: “Sales are critical, but don’t fear failure. It’s a learning experience, a teacher not an undertaker, a stepping-stone to success. Every successful entrepreneur will have failure stories, so welcome to the club.”
Matt Franklin
New Innovation Catalyst at TVSP
Paul Boswell highlighted that Barclays has been revealed as a major new partner of Innovation Catalyst: a collaboration between VitalSix and Thames Valley Science Park (TVSP) at TVSP’s new flexible workspace facility at its Shinfield Campus, Reading.
The Barclays Eagle Lab will formally launch in March 2018 and in conjunction with Innovation Catalyst will deliver extensive resources including a 60-seat co-working site, a 16-week intensive Accelerator programme designed to shape and scale the next generation of Reading and Thames Valley businesses, in addition to access to expert mentoring.
Mark Evans
Tamsin Napier-Munn
businessmag.co.uk 39
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