Just under 500 small businesses are responsible for much of the South West’s economic growth and are creating vital wealth and jobs, according to a new report.
These 490 high-growth firms represent only 5.1% of all small businesses in the region, yet they play an extraordinary role in boosting the economy, reveals research by Santander Corporate Banking.
Its Breakthrough Growth Champions Report examined growth patterns among businesses turning over between £500,000 and £10m and found that a small number of them have a significantly higher economic impact than the rest.
These companies proved to be exceptionally resilient during the recession, creating 14,792 jobs between 2007 and 2010.
Many of these expanding firms operate outside the traditional high-growth sectors of high-tech and business services. Instead nearly 15% came from social work, 11.4% were from complementary medicine, such as homeopathy and physiotherapy, and 7.7% from architectural and engineering activities.
They also displayed a number of common characteristics, including strong teamwork and relationships; youthful leadership; high levels of ambition; directors with a history of entrepreneurial success; and a proactive approach to cash and credit management.
The report also identified 248 possible Future Stars in the South West – businesses with a higher probability of achieving significant and sustained growth in net worth, sales and employment.
Santander Corporate Banking regional director Julian Alexander said: “This research shows a small group of businesses make an extraordinary contribution to the local economy. These Growth Champions demonstrate a fantastic ability to excel against the backdrop of difficult trading circumstances, delivering significant growth in both employment and net worth.
“Contrary to popular thinking, these champion businesses operate across a wide range of industry sectors proving that fast growth is not confined to the technology industry.
“Banks have a responsibility to support businesses to accelerate growth at all stages of their lifecycle. Using the common characteristics exhibited by Growth Champions, we can identify the fast-growth businesses of the future and provide the support they need to help them fulfil their potential.”
Using the research, Santander designed its Breakthrough programme to specifically support these companies in the early stages of their growth cycle and help accelerate their growth trajectory.