Inside the minds of business leaders

What did 200 UK business leaders have to say
about running a business?

Mid-sized businesses are expected to grow by 18%, compared with just 8% for the largest companies.*

We spoke to the leaders of these businesses…

*Study by Gowling WLG

Has their business grown in the last year?

0 Have grown
0 Stayed roughly the same
0 Shrunk

Where are they growing?

GrowthShrink

London 0 Growth
Herts/Essex 0 Growth
Cambridgeshire 0 Growth
Norfolk 0 Growth

And what were their reasons?

Growing

The economy doing well
The good fortune of our main customers being busier
Networking
We won an award
Growth of housing
Increased marketing
The quality of our product

Shrinking

The raw material costs have gone up as a result of the EU membership vote
Our customers are slashing their budgets
Government policy
Brexit
I wish I knew!
Uncertainty
The sale of one of our customers

What do they think about the economic condition of the UK for the next year?

0 Improve
0 Stay the same
0 Get Worse

Brexit

Time passed since vote

Whether businesses are making £1 million or £10 million the majority voted to stay in the EU.

Did they want Brexit?

0  in 10 were ‘remainers’

Is Brexit having an impact on their business?

0 say Brexit has made no difference

Only 1 in 10 business leaders named Brexit as their top concern for 2018

15% of businesses want a hard Brexit.

However…

30% of businesses who want a hard Brexit said that staying in the EU would have been better for their business.

What are their top concerns running a business?

No. 1

Recruiting and keeping the right talent

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Read why
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No.1

Recruiting and keeping the right talent

Those who believe they will grow at more than 11% over the coming three years see recruitment as an even bigger challenge compared with the sample as a whole.

Finding the right talent is not the only conundrum they face when it comes to their human resources. Deciding on the optimal head count is more important than ever. The costs of employing people (employers’ National Insurance, in-work benefits, newly compulsory pension contributions) are growing along with the costs of redundancies if things don’t work out.

This makes recruitment a twin challenge – finding good people who will help the business grow, while identifying the areas where headcount can be kept down, perhaps by outsourcing non-core and often complex activities.

What are their top concerns running a business?

No. 2

The value of the pound

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What the experts say
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No. 2

The value of the pound

“The economy is heavily dependent on household consumption, which cannot continue to grow with wage growth trailing inflation and savings levels falling. That said, household indebtedness is below the 2007 peak so there is unlikely to be a cliff edge in the short term.”
James Sproule, Chief Economist at the Legatum Institute

Read moreThe obstacles facing Owner Managed Businesses today: Q&A with former Chief Economist, James Sproule

What are their top concerns running a business?

No. 3

Dealing with regulation

How are they looking to grow their business?

No. 1

Selling to new customers

No. 2

Selling to existing customers

No. 3

Enhancing online presence

No. 4

Increasing prices

No. 5

Acquiring additional businesses

Those that are anticipating more than 11% growth are more likely to do so through inorganic ways e.g. Mergers, acquisitions & joint-ventures

Do they have a business plan for growth?

76% Yes
24% No

Businesses without a business plan have grown less over the past year.

Those that have a business plan are much more optimistic about the growth of their business going forward.

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Read why
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Only 34% who do not have a plan say they will improve VS 56% who do have a plan.
It is understandable for decision makers not to look at their business plan regularly or to keep their plan largely in their heads, but it’s not the most effective approach.
The results suggest that those without a business plan have grown less over the past year and have lower growth expectations for the future.

Read moreHow to create a business plan to raise investment

Are they exporting?

0 don’t export anything at all

Post-Brexit, the majority of businesses that do export expect to export about the same amount to the EU

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What the experts say
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“If we retain a relatively frictionless customs border with the EU, which the UK government has proposed, then that will also help exporters retain their market position. This is certainly possible and the heavily trafficked example of the US – Canadian border shows how it might work.”


James Sproule, Chief Economist at the Legatum Institute

Read moreThe obstacles facing Owner Managed Businesses today: Q&A with former Chief Economist, James Sproule

Getting investment

“Businesses requiring funding to invest, might want to consider bringing that investment forward before the liquidity situation worsens and debt becomes more expensive.”

Anthony Ward, Co-Founder of Armajaro

What would they like the government to do to support them?

Focus on small businesses with more support
Make it easier to take on apprentices
No idea, we just get on with it
Lower corporation tax
Allow foreign EU workers to remain
Less regulations

Work and life

0 say they are hitting a good work-life balance

Work and life

0 now see no separation between their work and personal lives

Work and life

0  in 10 have not taken a two-week holiday in the last year
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What does this mean
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Many of the decision makers are upbeat about their own lives. They work hard but enjoy the fruits of it, including the flexibility to fit work around leisure and family time even if it means two-week holidays are a rarity.
Being your own boss means enjoying great personal freedom despite the attendant workloads and responsibilities. Those less satisfied with their work/life balance also expect greater growth going forward, showing how leaders of this mentality tend to put themselves under greater pressure.

Do they have an exit plan from their business?

Only 24% have an exit plan in place

Those that expect to increase revenue by more than 11% over the coming three years, are also associated with those that have business and exit plans

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Not everyone wants to think about or consider it, but it’s important to plan for the eventuality that you will one day depart from your business.

The businesses in the survey that expect to increase revenue by more than 11% over the coming three years, are also associated with those that have business and exit plans, and who think in a methodical way about staff retention and recruitment.

In other words, those who think clearly about the big strategic issues are likely to benefit from it.

Read moreExit strategy: Selling your business vs family succession

Share

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Exit strategy: Selling your business vs family succession

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The obstacles facing Owner Managed Businesses today: Q&A with former Chief Economist, James Sproule

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Inside the Minds of Business Leaders: Download the full report

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