It has been over two years since the UK made the historic decision to leave the European Union, and the date for our formal exit is fast approaching. On 29 March 2019 – at 11pm, to be precise – the country will depart the EU.
Details of the actual withdrawal process have continued to cause debate, but the UK government has been looking at how the country can take advantage of the opportunities Brexit may offer, particularly when it comes to our expanding community of start-ups and scale-ups.
It’s true that new businesses have been rapidly springing up across the country – between 2012 and 2017 there were 3.5 million start-ups launched. This is impressive, and the UK government has improved access to finance, encouraging international opportunities for exports, and promoting tech skilled migration.
Collectively, these reforms represent a move to ensure UK SMEs will flourish post-Brexit. However, there exists a fundamental challenge for young companies – transitioning from a start-up into fully-fledged SME. The figures are startling – of all the companies established in the UK in 2013, only a little over half were still in existence by 2017. The challenge, therefore, is not so much encouraging the launch of start-ups, but ensuring they can effectively pass the three-year milestone and become a scale-up.
So with that being said, what do entrepreneurs need to keep in mind during the formative stages of their business?
You don’t have to look far to find a success story about a UK company that has, for example, raised millions of pounds worth of investment or is preparing to launch overseas. While this can be a strong source of inspiration, it can also compel entrepreneurs to set company milestones that are simply unattainable.
No business model is perfect, which is why different elements of a start-up’s service or product needs to be tried, tested and refined in accordance with the demands of the market. This is known as pivoting, and as per the evolution of the business model, targets must also remain realistic.
Ultimately, growth needs to be measured through regular and achievable targets, helping to reduce the risks and costs involved in a decision should it fail to deliver the desired results. At these critical early stages, it is important to minimise risk and not expose the business to any unnecessary challenges.
Take advantage of incubator and accelerator programmes
The time, money and stress involved in getting a business off the ground can take a huge toll on an entrepreneur. As a result, feelings of isolation and loneliness can be all too common and it is important that any business leader develop a proper understanding of the instruments available to support their growth. Thankfully, the UK boasts an extensive network of incubator and accelerator programmes offering guidance and mentorship, not to mention a fantastic forum to connect with like-minded entrepreneurs.
When it comes to incubator programmes in particular, early-stage companies can form valuable connections with investors who are not only interested in investing, but also serving on the board to help with the strategic guidance of the business.
Take advantage of existing technology
Digital innovation is rapidly changing the way in which consumers and businesses interact, and now, demands and expectations for products that have an effective tech component are high.
A survey of 2,000 UK adults by Studio Graphene recently found that half of consumers will leave a business’ website in just 30 seconds if it’s ugly or hard to navigate. Moreover, 24 per cent of the respondents said that in the past five years they had switched loyalty to a firm whose technology delivers a better customer experience.
Having a strong business concept is one thing, but ensuring it is accessible and meets the demands of the market requires equal attention – a start-up must constantly strive to improve its offering. This doesn’t have to be an expensive venture and useful technologies are now highly accessible.
Rather than always looking to create new solutions from scratch, many successful start-ups harness existing technologies. This will save a company time and money, helping to complement the resources already invested by a start-up in its own proposition.
The UK’s entrepreneurial future looks bright, and with local companies now at the forefront of disruption across established and emerging sectors, there is a need to ensure more entrepreneurs can transform their start-up into a scaling and profitable entity. Following these pieces of advice will help business leaders avoid common pitfalls that damage a start-up’s chances of success; in turn this puts them in a stronger position as the UK heads for Brexit and beyond.