Posted: Wed 24th Nov 2021
A new report, analysing businesses and their performance during the pandemic, has been published. The '10 Per Cent', a joint initiative from Enterprise Nation, Santander and the Enterprise Trust, reveals the secrets of the one in 10 entrepreneurs throughout the UK that have seen turnover increase by more than 50% over the pandemic.
These ‘10 Per Cent’ have all executed common strategies for their businesses when faced with the economic shock of the pandemic and lockdown: they changed plans; pivoted towards opportunity; capitalised on the accelerated pace of change; leveraged pre-existing competitive advantage; invested in research and development and embraced technology.
The research within the report, carried out by Opinium amongst 500 growing businesses, also revealed that those based in the nation’s capital performed strongest, with more than a third (35%) of the '10 Per Cent’ based in London. West Midlands was home to 11% of high performing firms, the highest outside London, followed by the South East, and Yorkshire and the Humber at 9%.
The analysis also compared the businesses by sector and revealed that those operating in the financial services and insurance sectors were the best performing (17%) followed by information communication and manufacturing (15%).
Interestingly, those businesses that pre-pandemic were already high-growth – i.e. demonstrated consecutive annual turnover growth of more than 20% - increased their performance even greater, achieving 27% year on year.
Perhaps aptly, given the ongoing significance of COP26, the ‘10 Per Cent’ also shared a belief that a movement towards a greener economy offered opportunity for business, as well as environmental benefits (72%).
The success of these high performing businesses during the pandemic is best underlined by the fact that one in six (18%) of them actually created job opportunities during the difficult times, underlining the importance of small businesses in boosting the wider economy.
The need to boost the economy was core to the key output of the wider report – which is the call on the government to help entrepreneurs build resilience and learn the habits of the one in 10.
Lessons for businesses to build resilence
The report identifies 18 practical recommendations for the government to learn the lessons of the UK’s outlier businesses to ensure more firms can build resilience and significantly prosper during economic shocks.
Encouraging and pointing businesses to support offered by the private sector to help technology adoption with an emphasis on efficient use of digital tools to increase long term productivity and resilience.
Support businesses to understand and enable the opportunities for future models of work and innovation.
Consider and lead on the indirectly impacted industries and systems such as transport, mobility and the high street. With the uptake of homeworking and the decline of bricks and mortar retail, there’s a potential need to radically reimagine urban spaces. This should be tackled head-on rather than waiting for irrecoverable decay.
Build back balanced: Ensure local small businesses are included in employer representative bodies as part of the development of local skills improvement plans as part of the Skills and Post-16 Education Bill. This will ensure small local firms have access to a trained workforce with relevant skills.
Prioritise the ‘green recovery’ – consider empowering and rewarding UK businesses leading the global charge to achieve net zero by encouraging businesses to invest in environmentally efficient equipment by extending Super Deduction allowances for those investing in greener plant and machinery.
John Baldwin, head of commercial clients at Santander, said:
“I would encourage every UK business to read this report and consider some of the key lessons from trailblazers – the fast-growing businesses. They are agile in their approach to technology, using it to drive efficiencies and challenge the way they work.
"Fast decision making is a common feature of trailblazers. They invest in their teams and in doing so, generate opportunities from within their business to grow. Trailblazers embrace changes forced on their business models and markets, so they are emerging from the pandemic, leaner and stronger.”
Emma Jones, founder of Enterprise Nation, said:
“This research demonstrates more than ever the need to upskill entrepreneurs in innovation management to help them identify and evaluate opportunity.
“While it’s clear it is a small minority of outliers that are in a position to respond positively to economic shocks, what this report shows is that resilience, planning and technology are key components of every successful entrepreneur’s playbook.
“We need to see these strategies digested and adopted by all businesses to ensure they can be ready to win when the good times return.”
Helen Booth, director of the Enterprise Trust, said:
“Understanding market opportunities such as the green economy is a vital skill for entrepreneurs. This report makes it clear consideration needs to be given to delivering the knowledge as well as the skills we will need for the future economy and to hit net zero targets.”
Of businesses that had performed well during the pandemic, 11% reported turnover increased by more than 50% compared to what it would normally be
Businesses with 50+ employees were more likely to report seeing an increase in turnover than smaller firms
24% saw a surge in demand
21% had built new partnerships
19% had developed new products and services
18% created job opportunities
Speed and agility proved to be key for these businesses in the face of the pandemic
Two in five of strong performing businesses (43%) found government-backed loans important
28% reported remote working had made staff more productive and the pandemic had highlighted limited need for permanent office/shop space
Flexible working is the change that businesses are most likely to make permanent (42%)
Just over half (53%) plan to invest more in tech, data, and digitalisation over the next three years
87% feel confident about their business prospects over the next 12 months, with 10% expecting turnover growth to continue by at least 50%
72% saw the green economy as an opportunity
80% of those that did well had implemented changes before the end of March 2020