Helm is a community of like-minded business founders with businesses already over £1m. The founders who join Helm want to scale their business. They have already reached the £1m mark and this means the business has gone through changes and is a different outfit from the one it was at launch.
Lots of Helm members have raised funding, or are in the process of doing so and many have appointed senior leaders to allow them to step back from day-to-day operations. Plenty have also launched secondary products or service lines, or have implemented a growth framework, such as the Entrepreneurial Operating System (EOS).
Whatever they have already done and achieved, they recognise that there is a lot more they still need and want to do. This where being part of the Helm community comes into its own. The ability to share ideas and insights, tips, contacts with and suggestions from fellow founders prove useful boosters for growth. Members tell us all the time how much they value both the wisdom of fellow members and the ability to help each other.
Projected business growth
For all the doom and gloom in the global economy and financial markets, Helm members remain resolutely positive and upbeat, decisively more so than when we asked them last year.
Helm member, investor and tech founder, Fiona Hudson-Kelly, points out that this time last year we were still in the grip of Covid uncertainty. “While things were picking back up at this point, there was still a lot of concern whether we’d go back into lockdown,” she says. For members in some sectors, Covid-19 was a “near-death experience” and so it’s natural it would have had a chilling effect on confidence, with the prospect of more shut downs still in the air when we asked members in 2021.
The impact of Covid-19 uncertainty on last year’s findings is hard to calculate, but it was clearly a factor when we asked members to predict growth for 2022. Now, after a year of political chaos in the UK and impact of the ongoing war in Ukraine, recession, rising inflation and higher interest rates, when asked to predict their growth next year, members’ average projected growth rate was 57%. This compares to 38% when we asked in 2021.
Perhaps as an indicator of the increasing use of automation, a reflection of the need to get better productivity out of their existing team, or a realistic assessment of the difficulty they will face in finding and recruiting talent, the difference in predicted headcount growth rate this year compared to last years is significantly less noticeable.
When asked to project growth rate in headcount for 2023, members offered an average projected growth of 23%, compared to 21% last year.
The lingering clouds of the pandemic loomed over the 2021 survey, and when members were asked to predict 2022 growth they were reflecting on another year of lockdowns, upheaval and uncertainty. While the crisis of the pandemic has passed for now, it has been replaced by a rolling series of new ones. No wonder Collins Dictionary chose “permacrisis” as the word of 2022.
And yet, something in the nature of these crises, from recession to inflation and high interest rates and even – to a lesser extent – war, is familiar to founders. With the exception of a war in Europe, many founders have witnessed or experienced such political and economic upheavals before.
The dramatic threat of complete shutdown and the existential threat Covid represented had a far more chilling effect on business confidence than more manageable problems of supply chain logistics, political party leadership contests and a potential recession.
In fact, some of our more entrepreneurial members claim to see opportunity in recession and uncertainty. Having sat through two years of the pandemic, many also speak of having reached a point when they simply refuse to give in anymore. It is time, many feel, to just get back to life as normal and to get back to running their business in that manner, too.
Most economic forecasts for next year suggest inflation and the cost-of-doing-business will remain high. The energy crisis is unlikely to resolve quickly and government support for business energy costs will end in the spring. With inflation at a 40-year high, founders are aware of the extra vulnerability this brings, not to mention the risks of recession. It is great to see members so optimistic on business growth, even as they remain realistic when it comes to headcount.
Methods of growth
Members are optimistic that they will be growing and scaling their business through 2023. But there are many different routes and methods to grow a business.
Helm members operate across a wide range of industries and run businesses at all stages of the business life cycle, so it’s not surprising to find a wide spread of opinion in terms of the most likely method of expansion.
The pattern is broadly similar to last year, with the most popular route for growth for Helm members being growth in their existing market. This is down slightly at 80% this year, compared to 85% last year. The slight drop may be a further indicator (if any were needed) that members are seeing the UK economy take a slight dip.
Perhaps the most surprising shift, and a possible sign thatM&A deal volume may pick up again next year (after a disappointing 2022, compared to a bumper 2021), is the fact that 35% expect to grow by acquisition next year, a figure that has leapt up from just 13% last year. It may be that the cooling of the market in 2022 has taken some heat out of prices and made more members feel an acquisition may be more affordable now.
As a collection of innovators and entrepreneurs, it is not surprising to find new product development rank highly again as a means of growth, with 58% expecting to develop new products or services this year, compared to 61% last year.
The acceleration of technological change is perhaps reflected in the expectation of 40% of members that new models and channels will feed growth this year, up from 32% last year. And while the global economy is also experiencing uncertainty, the importance of global trade is made clear as 35% of members expect to grow through international expansion, up from 33%last year.