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Top Line Growth Gets Second Billing In 2009 For Uk’S Entrepreneurs

Growth will take a backseat to survival for the UK’s entrepreneurs this year, according to the results of the annual Entrepreneurship UK report by Deloitte, the business advisory firm.

The survey of nearly 300 entrepreneurs from across the UK revealed a fifth of firms expect to see no revenue growth in their business in 2009 (versus 7% in 2008).  However, the survey also shows how the recession has exposed frailties in their businesses, which they have been slow to rectify in order to secure the long-term survival of their business.

While the recession has exposed just how much room for improvement there is in many businesses, the Scots appear to have a more bullish outlook on what lies ahead over the next few years.

Jim Boyle, Partner in charge of Deloitte’s Scottish Entrepreneurial Business team, commented: “Over the last two years we have seen a number of entrepreneurial Scottish businesses continue their growth and acquisitions strategy, albeit in a more cautious and measured way. It is really encouraging to see so many Scottish businesses remaining so positive and confident about their long-term prospects, with 21% of Scots participants anticipating a 50-100% growth rate in the next 3 years versus 14% across the UK as a whole.

The survey also found that many Scots businesses would increasingly look towards strategic alliances and collaboration as a driver of this growth with 23% of those surveyed in Scotland citing this compared to only 17% in the rest of the UK.

Boyle commented: “This is a very interesting response and shows that Scottish companies are taking a smart approach to growing their businesses. Alliances and collaborations can be an excellent way of improving access to expertise, funding and resources as well as building the chances of success whilst at the same time sharing the downside risks.”

One other key finding was that over a quarter of the Scots businesses surveyed are making more use of mentors, non-executive directors and accountants than a year ago.

Boyle added: “This comes as no surprise. For many years Scotland has had a culture that supports and nurtures entrepreneurs and innovation and there are a number of very well established and active networking and support organisations, not least the Entrepreneurial Exchange. Especially in these challenging times, the benefits of tapping into this experience and getting different perspectives can be invaluable.”

John Anderson, Chief Executive of the Entrepreneurial Exchange said: “The findings of the Deloitte report confirm what we are seeing day to day amongst the members of the Entrepreneurial Exchange.  We have the added benefit of being able to tap into the experience of our more seasoned members who have seen tough times before and thrived.  These role models have been fantastically supportive in recent times and are happy to share their knowledge of what works and what does not with those who are facing these conditions for the first time.  We have long had a culture of asking for help and advice and again this seems to be coming through strongly in the report results. This augurs well for the ambitious entrepreneur in Scotland.” 

From a UK perspective, other key findings from the report include:

  • Just 12% of businesses believe they will generate growth of more than 50% in the next 12 months, compared with 21% in last year’s survey;
  • Founders who are still involved in the business appear to be more optimistic than the average with 17% believing they will achieve greater than 50% growth in the next 12 months;
  • 36% of firms across the UK are focusing more on profitability to judge their growth levels (compared with 30% in 2008);
  • Four in ten businesses say a new owner would cut head office and admin costs and nearly a quarter believe they could cut back on salaries and bonuses;
  • Just 39% of respondents have a ‘very good idea’ of their competitors’ business.

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