Midlands companies are perfectly placed to build UK and international scale
As growth companies get ready to meet at Scaleup Week 2022, Nick Holder of BGF – the UK and Ireland’s most active growth capital investor – sets out the opportunities and challenges of expanding beyond your domestic market.
Companies at every stage of growth and in every sector are facing a considerable array of challenges, from higher energy and wage bills to faltering consumer confidence. Growth companies taking part in Scaleup Week 2022 later this month will have the an opportunity to learn from the UK’s scaleup leaders, how they tackled periods of slow growth and volatility in the past, and what their experiences have taught them about taking the next step, particularly in uncertain times, through innovation and strong leadership.
For fast-growing companies, the reality is they may be entering a period where growth stops, and management teams need to be armed with plans for a range of different scenarios. Certainly, all businesses should make sure they have enough cash set aside for their worst-case scenario, but entrepreneurs should also view this cash as an opportunity for the future. The companies with capital and resources on hand will be best placed to take market share and deliver stronger growth when the economy recovers.
In the Midlands we also believe companies in the region have a number of advantages when it comes to building scale across the UK or pursuing international expansion.
Strong domestic connections
Geography is the first clear benefit, with good transport access and strong logistics hubs across the Midlands. The second is the diversity of industries operating here. We have a wealth of different sectors that are operating across the region, and while recruitment remains a challenge as it does everywhere, scaleup companies in the Midlands have good sources of talent from both of the excellent universities, and the large corporates based here.
Finally, there is also a cohesive network of business support, from chambers of commerce and local enterprise partnerships to investors, including BGF, who are working hard to make sure local companies thrive. The recent Commonwealth Games in Birmingham coincided with two foreign direct-investment projects in the city, including The Disposal Company, a plastic offset platform from India, and Kora, a Canadian fintech building payments infrastructure for companies across Africa. The West Midlands is on the global map, and its future is only getting brighter.
Growth opportunities for exporters
For companies turning their attention to growth opportunities outside the UK, laying the groundwork is key. The good news is that high street banks have a lot of tools to help your business start exporting. The Department for International Trade and investors like BGF, also offer advice and funding for international growth strategies.
The information-gathering stage cannot start soon enough, but it’s also important to visit the countries you’re looking to target to ensure you understand the legal, cultural, and logistical intricacies you are likely to face. Another vital consideration for potential exporters is making sure you have enough capital to do what you need to do – it rarely costs less than expected, and you don’t want to have to retrench because you ran out of money.
A great example of a Midlands export success story is Chase Distillery, which BGF backed in 2017. The Herefordshire-based gin and vodka brand was bought by Diageo, the maker of Smirnoff and Gordon’s, in 2020, after expanding to 48 countries worldwide.