The risk of business insolvency should be high on the agenda of any new company or small business, whose finances are typically less able to withstand sudden shocks.
But figures from Octopus Investments show why protecting small firms is critical to the UK economy and workforce as a whole.
Small firms often have huge growth potential – not only in proportional terms considering their size, but in absolute terms too.
Octopus Investments reports that high-growth small businesses accounted for 34% of all employment growth last year, as well as 20% of economic growth.
This is despite the fact that HGSBs represent less than 1% of all UK businesses.
Regional growth is also being driven by HGSBs in particular, with three fifths located outside of London and the south-east.
And while many people think ‘high-growth’ is synonymous with the technology sector, only one in ten HGSBs are directly involved in technology, with 65% providing services.
Despite their huge potential for the economy, many small firms lack financial awareness, and simply do not know about some of the funding available to them through government initiatives.
Simon Rogerson, CEO of Octopus, said: “This year’s report highlights the ambitions and frustrations of some of the UK’s most entrepreneurial small companies, and has underlined what they require to give their business a fighting chance to succeed.”
Of course, in order to succeed, you have to survive – and avoiding business insolvency is crucial to allowing these firms to grow, generate income for the UK economy, and add to the availability of jobs for Britain’s workforce as well.
We are happy to provide advice on bankruptcy, corporate insolvency and administration to small and fast-growing firms – even if you are not currently facing financial difficulty.
By being prepared, you know how to respond if times get tough and your rapid rate of growth slows down, and this can be critical in preventing your finances from outpacing your growth, and leading you rapidly into an untenable trading position.
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