5 min read18 March 2019
From one-man or one-woman bands to companies with huge annual turnovers, SMEs are central to the Northern economy. We explore the ingredients to their success.18 March 2019
They are found in every village, town and city in the North of England. From one-man bands to companies with substantial turnovers, small and medium-sized enterprises (SMEs) are at the heart of the Northern economy.
Recent figures from the Department for Business, Energy & Industrial Strategy show that Yorkshire & Humber is one of the fastest growing regions for SMEs – outstripping London. And, depending on the sector, other Northern regions are doing well. In the North West, for example, the Tech Nation Report 2018 calculated that Manchester saw a rise in digital business births between 2011 and 2016 of 130 per cent.
But it’s in the increase in advice available to businesses where growth is particularly noticeable. Not-for-profits, chambers of commerce and local councils have all stepped up the services they offer to companies looking to scale-up.
Helen Oldham is founder of NorthInvest, a not-for-profit early stage investment connector for tech start-ups. The firm coaches entrepreneurs to be investor-ready and provides private individuals with vetted investment opportunities. Essentially, the organisation exists to ensure that the North achieves its potential in the tech sector.
NorthInvest, a not-for-profit early stage investment connector for tech start-ups.
“There is still a huge discrepancy between Angel investments in London, Cambridge, Oxford and the South East, and the North of England,” says Oldham. “In 2017, British Business Bank statistics showed that only 5 per cent of UK Angel Investments were made in Yorkshire, 5 per cent in the North East and 8 per cent in the North West. So it's good to see that there is an increase in activity to fill that gap.
“In 2017, information gathered on business scale-ups showed Leeds to be one of the UK’s most important centres for fast-growing firms, coming in just behind London, with a large percentage of start-ups achieving more than 20 per cent growth. There is a growing ecosystem of support for fast growth businesses in the North. Sectors which we predict will see the most start up activity in 2019 in the North are medtech, fintech, immersive tech and cyber security, where we have both the talent pool and ecosystem to build world class businesses.”
Oldham says that while the help needed by SMEs varies from business to business, there are a number of core issues including robust financial planning, talent to fulfil future needs, and support from individuals who have been through the fast growth cycle themselves.
Esther Clare from the Membership Services Executive at Greater Manchester Chamber of Commerce agrees that seeking advice from those who have already been through the process of growing their business is useful.
“It is important for the business community to act as each other’s mentors, share best practice and support each other to grow. Scale-ups can often gain the most from other businesses and their first-hand experience. Becoming part of a business network is an extremely effective way for start-ups to glean advice and guidance from experienced and successful entrepreneurs.”
Greater Manchester Chamber of Commerce primarily works to help connect small businesses with like-minded companies in the region, as well as provide the tools they need to embark on their growth journey. It offers services based around recruitment, training and international trade and works closely with a number of trusted partners to offer its members extensive business support. This includes employment advice, industry updates and innovation initiatives, as well as cash flow and digital support.
Clare says: “The number of organisations in the North who are seeking to promote alternative investment and funding for small businesses is on the rise, with traditional options facing significantly heightened demand. Connecting Greater Manchester companies with both expertise and reliable investment opportunities in the region is certainly a priority for many organisations in order to allow the growth that is clearly attainable in the region to be realised.”
She adds: “Greater Manchester is certainly seeing a rise in start-up culture across the region. As the area develops its reputation as a centre for digital growth and innovation, more and more businesses are looking to start their growth journey in Manchester. The scale-up ecosystem is thriving, and support for small businesses is becoming more and more widely available. Working together with other regions in the North of England through initiatives such as the Northern Powerhouse is just one of the ways in which the North has an advantage. Sharing resources and opportunities helps to boost the region as a whole, and benefit the highest number of businesses possible, including start-up and scale-up companies.”
The Literary and Philosophical Society of Newcastle, Newcastle upon Tyne, United Kingdom
According to the Federation of Small Businesses (FSB), small businesses in the North East contribute more to their local economies than firms from any other region in the UK. In fact, nine in ten small businesses in the North East are actively involved in their community. The FSB’s Small Business, Big Heart report, published in February, said that one in three small employers in the North East have hired people with a disability or mental health condition, while one in four offer work experience.
At Newcastle City Council, officials provide a contact point for businesses through its Economic Development function, and through the Business & Intellectual Property Centre (BIPC), a joint project with the British Library and local business support service providers. The BIPC provides access to intellectual property advice and support, business information services and specialised business advice, as well as innovation and growth services through an ERDF-funded ‘Pathways to Innovation' project. The council also helps businesses to find suitable premises in the city, either within the council’s own specialised enterprise centres and a wide-ranging property portfolio, or in workspace provided by others.
A spokesperson for the council says: “Where appropriate, we signpost businesses to other sources of support available from Enterprise Agencies, local universities and other partners. The Growth Hub, maintained by the North East LEP, brings together information on most business support and finance offers in the North East, and is a key route that we signpost businesses to.”
She continues: “We offer a good business support eco-system and a range of funding available to meet the needs of new and growing businesses as well as a range of excellent premises that provide affordable space to grow and network with other businesses. And we have a fantastic pool of talented people, with the highest density of students per capita of any UK city, and five universities within an hour’s travel producing a wide range of well-trained graduates.”
Meanwhile, there is also help and advice for businesses looking to expand in Yorkshire, as Sandy Needham, chief executive of West and North Yorkshire Chamber of Commerce, explains.
“We have a subsidiary company, BEF (Business Enterprise Finance Ltd) so we promote that source of lending. However, there are quite a number of sources and we refer businesses to the Leeds City Region Local Enterprise Partnership because they list a range of financial bodies and grants through their website and via their Growth Hubs, who deal with telephone enquiries. At any time, there are various funded programmes working with specific target groups and the banks of course, so a complicated and ever-changing picture.”
Get a regular dose of the best small business finance news, stories and curated articles sent direct to your inbox. Sign up for our newsletter. No spam just inspo.