Small business 'scale-up gap is closing'

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Many small firms are taking the leap to become larger operations

An increasing number of smaller businesses are successfully making the transition into larger firms in the UK, with a significant level of employee growth witnessed across the sector in the last two years.

Research published by multinational software developer Citrix has revealed how 33 per cent of small UK businesses have taken on more staff in the last 24 months, with almost half of these businesses having grown by more than 50 per cent.

Facilitating growth is one of the key drivers of economic recovery for the nation as a whole, with more businesses helping to deliver new jobs and bolster employment. This, in turn, leads to increased spending (as more people have access to disposable income) and these funds are channelled back into bolstering the economic outlook for all.

It is therefore extremely positive news that so many small to medium-sized enterprises (SMEs) have been benefiting from considerable growth of late, with the Citrix report showing as many as 1.675 million UK businesses have taken on additional staff since 2013.

Andrew Millard, senior director of international marketing at Citrix, commented: "SMEs are a critical engine of growth for the UK economy and this study illustrates the vibrancy within the sector over the last two years.

"Technology is clearly playing an important role in SMEs overcoming some of the traditional barriers to growth and digital competency is becoming the new currency of growth. We hear on a daily basis how our customers are using technology to reinvent not only the way they work but the markets that they operate in."

The Citrix publication follows a report released in 2014 by by Sherry Coutu that revealed UK businesses may now be closing the gap on their continental rivals in terms of helping smaller companies to take the next step to becoming larger organisations.

It defined a 'scale-up' as any business that was able to achieve average annual growth in revenue or employees of at least 20 per cent over three consecutive years, with one-tenth of all UK businesses now able to state they have achieved this criteria in 2015.

Looking forward, the prospects of smaller business operators across the country now appear to be improving, with ten per cent of all British businesses achieving the annual growth expected of a scale-ups, compared to just five per cent in the previous year.

Citrix's data showed that around 220,000 UK firms can now be classed as high growth scale-up companies, with these businesses providing a considerable boost to the economy as a whole through significant job creation and improved productivity output.

Furthermore, the report revealed 60 per cent of UK SMEs surveyed are now expecting to be doing business internationally by mid-2016 - a development that could not have been predicted at the height of the economic downturn, just a few short years ago.

As such, more than one quarter (28 per cent) of respondents predicted they will see an increase in revenues from overseas exports in the coming year, while almost three quarters (72 per cent) are intent on developing stronger links with their international business partners.

The prospects for smaller businesses across the UK therefore seem to be improving all the time, with those firms that are able to harness enhanced productivity from staff and couple this with a commitment to take on new leads likely to be the ones that will make that leap to becoming larger a enterprise as the economic recovery continues to take hold.