Scaling firms advised to seek external support to help navigate troubled backdrop
Business advisory firm Trachet has unveiled the results of the study that was designed to better understand the different factors that hinder companies from scaling, noting that founders and leaders are coming under increasing strain as they try to keep their organisations afloat.
It discovered that 34 per cent of British business leaders find that in running their business, they have no-one to support them, they do key tasks alone and that disconnects them from their passion. A further 27 per cent stated that they have no support role from whom they feel comfortable taking guidance, which is “indicative of the stigma surrounding asking for help”.
Trachet also said 21 per cent of respondents feel that while their businesses started successfully they are now encountering problems as they grow, and it cited the Small Business Administration finding that half of small and medium-sized enterprises (SMEs) fail by year five.
The business advisory firm also pointed to a study from the Centre for Enterprise and Economic Development Research showing that fast-growing businesses were more likely to have used external assistance, and significantly more likely to scale successfully, “indicating the importance of using external support as an essential resource”.
Trachet added that despite the documented benefits of seeking external support, the Journal of Political Economy published a paper indicating that entrepreneurs who have the opportunity to grow their business to the next level sometimes choose not to as they often prefer to remain in total control.
The advisory firm, led by founder and chief executive Claire Trachet, believes the impending economic recession and global pressure on prices are expected to hamper start-ups’ access to fundraising over the next few years.
Ms Trachet said: “The world, including the UK, is entering a rocky business environment over the next 12 months. If we’re talking about scaling SMEs or a start-up that’s going into a series A or B round of funding, I’d put my chips on seeking out support from someone with experience at a senior level that can help keep the company stay afloat financially and operationally.
"Again, the coming year is going to be tight for most – an external advisor might be the difference for many SMEs and start-ups that haven’t experienced a downcycle before.”
The Trachet business says its advisory team has been helping founders accelerate growth since 2016, “utilising decades of cross-industry experience as one of the only female-led teams in the sector”, and it has deep roots in working across tech sub-sectors, such as cleantech and fintech, and has provided its advisory services across the likes of chemicals, infrastructure, healthcare and natural resources.
One Scottish business leader to have recommended seeking external help is Brewgooder’s founder and executive chair Alan Mahon, who recently said: “Scotland’s such a small place – you're probably not more than two degrees of separation from somebody who can help you, whether it's an employment issue, or somebody who cares about your vision and wants to see you succeed. I think asking for help is always better than not.”
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