NW Growth: Entrepreneurs highlight key barriers

MANAGING rapid growth is a challenge entrepreneurial businesses face, according to a new report on Boosting the North West Economy.

Produced in association with Barclays the report found that while the spirit of enterprise is alive and well in the region in terms of the numbers of new businesses being started, but the survival rates beyond five years of trading are behind the national averge.

Click here to download our Boosting the North West Economy report.

This suggests that somewhere along the way businesses are losing their way, with issues such as funding, new product development, competition and being able to attract the right people, looming large on the agenda.

Retailer The Hut Group and food business Barburrito are two exciting,  North West businesses firmly in the growth mode

For Barburrito, which received £3.25m from the Business Growth Fund in 2012, finding the right partner to take it forward was a critical issue.

Co-founder Morgan Davies said: “Funding is a real challenge for us. We spent the best part of two years doing the rounds and talking to banks.
We realised we didn’t just want to be funded but we wanted a good relationship so we are lucky we teamed up with the Business Growth Fund.”

Steve Whitehead, Commercial Director at The Hut Group, which has raised more than £13m in two funding rounds in the last 12 months agreed: “Growth is a risk and it needs to be funded by hugely supportive shareholders who invest when things are good but also invest through the curve from start to finish.

“We have been very lucky with our debt and equity providers. With funding you want a sensible price but want to get on – we have a broad range of investors so we need people to feel there is plenty of skin in the game and they are all making money.”

As well as funding, fast growth has other challenges. The Hut Group employed around 100 people three years ago – today it has 550.

Mr Whitehead said, “For a high growth business recruitment is a key operational focus. Our head of talent spends a quarter of the year going around the universities to employ graduates – feeding in good people manages the risk.”

For Barburrito, one of the main challenges is locating good sites.

Mr Davies said: “The upside of what’s happening on the high street is that finding sites is now easier everywhere except London, which seems to be operating as separate from the rest of the economy at the moment. Who will fill the gap on the high street left by  administrations? Hopefully we can do that.”

Click here to download our North West business growth report .

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