A growing sense of what is possible
The Covid-19 pandemic has affected all businesses. We brought together a panel with Two Zero, the county’s scaleup programme, to ask if attitudes to growth have changed as a result and just how far a scaleup mindset can take businesses in the current climate.
David Shoesmith - Scaleup Institute
We see five key challenges for scaleup companies. First is access to the right talent, getting the right leaders within your business, getting the non-exec directors that you need.
Then there is accessing the right level of peer networks, which blends nicely into the leadership challenge within businesses and getting that entrepreneurial mindset correct. Then there is a challenge around accessing the right markets, whether within the UK or internationally.
Then there’s the challenge around accessing the right growth capital, which, given the current Covid crisis, has become more and more important to these businesses.
The other core challenge that we’ve seen is access to infrastructure. That’s the physical workspace and the capacity to grow within that, and the technological infrastructure that is needed.
Scaleups want to grow, that is what they’re about, they will do whatever they can to facilitate that growth. They will implement the strategies they need to encourage it.
We’re seeing a great increase in the number of SMEs who consider themselves to be ambitious risk takers, so are willing to make that next step and go out and get the growth capital, get the new customers.
There is a wealth of opportunity for equity funding and for other sources of funding, especially in the North West. Equity is not necessarily the big evil. And it’s not like Dragons’ Den.
Stephen Gregson - MHA Moore & Smalley
We’re seeing businesses pivot to something slightly different, either because their market has moved or it’s shrunk or it’s grown. The old business model hasn’t been thrown out of the window but events are forcing them to alter it to take account of the new situation.
What is fundamental if you are going to seek funding is clarity and honesty and communication. When you are going to potential investors be very clear about what it is you need and how you’re going to use it, and how you think it’s going to have a positive impact.
The worst thing is if you’ve secured funding on a business plan with a narrative that funders have bought into, but you know in the back of your head the reality is going to be different. As soon as you have that mismatch you are setting yourself up for pain.
When it comes to funding there is more than one way to achieve what you want. Often clients will say to us that they need half a million pounds. But when you dig under the surface and look at other ways of dealing with the issue, it may be that they only need £200,000 now and £100,000 down the line.
It’s about that creativity, that curiosity, that playing with the problem, the challenge, the funding need, and trying to reshape it or remould it so the requirement becomes less.
To drive innovation, you need curiosity.
Amin Vepari - Two Zero
In this period of the pandemic, businesses have been able to pivot, and certainly opportunities have arisen.
One of the things we’re now discussing is how do we work towards growth funding?
Are people going to use what’s happened in the last few months as the benchmark to say, ‘well that’s the way borrowing should be’?
Pre-Covid, apart from our core activities, I identified three priorities that we needed to work more on. One was peer-to-peer, another was non-exec directors and how important and pivotal they are to businesses and third was the different scopes of investment, particularly equity investment.
The further north you go you find the less that equity has a take-up. That’s one of the things we want to fundamentally change. We want to educate people more about the benefits of equity investment, so they can then make informed choices.
We’ve adapted our Rosebud loan scheme and made it more flexible for businesses post-Covid.
We have an amazing eco-system in Lancashire, but we need to make sure businesses completely understand what it is we’re offering and how to access it, and that it’s not just reactive but proactive, more for the long-term and not just the immediate. It is one of our biggest challenges but we are working on it.
We have got a lot of good things happening in Lancashire, we’ve got a lot of things to shout about.
The ambition is on a new level, it’s bigger than it was previously. So, let’s get this done as a county and let’s move forwards, nationally and internationally
Lynn Sedgwick - Clayton Legal
Most of us here have been through at least one recession and what has been unusual in this situation is that business wasn’t open, and so adaptability was key; that ability to be really agile and open and to go and seek out knowledge; that ability to learn; and the mindset of wanting not just to survive but to thrive.
We’ve had a structural change. We’ve not just pivoted but almost done a 180 and introduced lots of tactical moves. We got a Coronavirus Business Interruption Loan and my challenge at the moment is how to invest it.
I’ve found the Two Zero Scaleup Resurgence programme super helpful in giving us the mindset to look at what is possible, because you don’t know what you don’t know. It’s been particularly beneficial in our three-year planning.
What I would say is that it’s short-term intervention and I’m looking more at longer-term intervention. It is all right doing a 90-day programme but what’s next?
We’ve tried to access some further funding for investment into learning and world-class thinking, but it has been quite difficult. So, the ‘what next?’ bit is key for me.
I keep coming back to the development of leaders.
Everyone’s talking about going out and getting funding. There are a lot of businesses that have got it and don’t know what to do next.
For me it is about that strategic investment.
Ben Blackburn - Blackburn Distribution
You have to have that resilience. Having been through difficult times before steels your mind. Surrounding yourself with positivity is key, great people from networks build up over time. The Chamber of Commerce, Boost, Two Zero, just having them say, ‘Don’t worry it is going to be alright, let’s crack on and make the most of it. Use it as an opportunity’.
In terms of being able to use some of the access to funding, that’s been easier and incorporating that with a growth mindset we went out and asked for a Coronavirus Business Interruption Loan. It was a way for us to invest an extra £100,000 in the business.
We’re now having discussions about the next year or two, working on a £1.5m loan. We need to think, does it all have to happen at once? And does it all have to come from a single source?
It is about having strong core operations in the business, making sure that we work hard so that the cogs are turning as smoothly as possible together. Because, for me, growth is wasted if the foundations of the business are weak.
Innovation can appear to be this new shiny thing but sometimes it can detract from where you’re already making money and the low hanging fruit. So the thing that we need to double down on is making sure that the business operations are there.
Sue Denver - Winning Pitch
For a lot of our clients, fast growth is still a priority. Some have used this time to take a fresh look at the business and to review their teams, look at capabilities and capacity. If they’ve had staff on furlough, they have reviewed who they want to bring back and in what positions. They have taken a strategic review and looked at roles and responsibilities.
We work with businesses that have more than ten staff and are looking to grow turnover by at least 20 per cent year-on-year. That is the mindset of the people that we engage with. They all want to take their business forward.
The conversation about ‘what next?’ comes up every time we meet a client. Regarding access to funding, it needs to be done in a coordinated way. It needs to be thought about in great detail.
As well as innovation and investment, we need to look at the people side of things; skills and abilities. We need to make sure that we manage and develop the team property. Also, it is about making sure you have got a defined offer, but not just a product: a proposition and a compelling brand.
Covid has caused a crisis but that crisis has acted as an accelerator in many ways
Stephen Allen - ATACC Group
Networking and learning from the experience of other people has enabled me to make the decisions to push my business forward. It is a thirst for knowledge. So, I would always encourage people to look around and see what support is out there.
There are those who say ‘I want to do it myself. I think I can do this’, but sometimes that is the wrong mindset.
There are so many people with so much talent and experience around us and one good thing from the pandemic is that it is forced together people who probably would never have done so before.
We’ve also got a Coronavirus Business Interruption Loan. It’s getting through this short-term bump in the road. In context of the bigger picture, it’s confidence that your business will survive and there is going to something that comes next. And that ‘what comes next’ is the bit that excites me most.
The pandemic has also opened everyone’s eyes to what Lancashire has got to offer. The funding that comes next should be about pulling this all together and making sure Lancashire works with Lancashire to make Lancashire better.
What is becoming more important for me personally is that sense of business community in this crisis.
Keeping that is going to be vital, because collaboration is going to be our strength.
Simon Turner - Freshfield
In a strange way, even though we’ve all been in lockdown, we’ve become closer as a community. I’ve felt a lot closer to my clients and my partners than I’ve ever done. We’ve probably seen five-or-six years’ worth of cultural change in the space of six months.
We’ve all learnt something about ourselves and our businesses and the feedback I’m getting is most people are seeing it as a huge opportunity to reshape for the better.
Our message to clients has been that you have to retain your visibility, you cannot hide or hibernate. You may be in lockdown, but your brand isn’t.
You’ve got to really understand how Covid has impacted your customer and their decision-making process. Unless you have that intelligence, you can’t shape a successful marketing strategy going forward.
Good entrepreneurs and business leaders have an element of calmness in tough situations. Yes, there is going to be some short-term pain but let’s look long-term.
Everybody has been talking reset, you have got to think about the recovery message because soon people will be thinking about where the journey turns to next.
Businesses are built on people and how we employ people, how we work with people is going to change forever, and businesses need to think carefully about how they recruit, retain and engage with those people.
That’s going to be a game changer.
Coun Michael Green – Lancashire County Council
Covid has caused a crisis but that crisis has acted as an accelerator in many ways. We’ve been forced to embrace new technologies and we’ve been forced to embrace change. There is a willingness across Lancashire, it’s part of the spirit of Lancastrians, to get on with things and to make a success of it. There are strong relationships here and we will build on those moving forward.
We need to enable businesses to transform, exploit the available markets and take advantage of the new types of economies moving forward and the sectors where there will be growth. We will move onto a new level and that growth will continue.
Marketing is more important than ever, both for individual businesses and for the county, to market itself as a place where business can be done.
The county council is more ambitious now than ever. We have £1.75bn of projects coming forward, right across the county, so that ambition has scaled up to a new level.
Boost works directly with business to enable their growth. We’ve supported 6,000 in the last seven years and that will continue. That support has continued through this pandemic and will move on now to help businesses move forwards. The ambition is on a new level, it’s bigger than it was previously.
So, let’s get this done as a county and let’s move forwards, nationally and internationally.
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