THE TEN PER CENT
Unleash the potential of entrepreneurs by learning the lessons of the one in ten
“The truth is that our finest moments are most likely to occur when we are feeling deeply uncomfortable, unhappy, and unfulfilled. For it is only in such moments, propelled by our discomfort, that we are likely to step out of our ruts and start searching for different ways or truer answers.”
The Enterprise Trust teams up with Santander and Enterprise Nation to introduce a major new study. The report finds that in one in ten trailblazers are prospering and powering the recovery through harnessing technology, embracing change and pivoting their business model. It identifies the need for the government to help entrepreneurs build resilience and learn the habits of the one in ten to power the economy.
Of businesses that had performed well during the pandemic, 11 per cent reported turnover increased by more than 50 per cent 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 per cent saw a surge in demand
21 per cent had built new partnerships
19 per cent had developed new products and services
18 per cent 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 per cent 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 per cent feel confident about their business prospects over the next 12 months, with 10 per cent expecting turnover growth to continue by at least 50 per cent
72 per cent saw green economy as opportunity
80 per cent of those that did well had implemented changes before the end of March 2020
A new report, analysing businesses and their performance during the pandemic, has been published. The Ten Per Cent, a joint initiative from the Enterprise Trust, Santander and Enterprise Nation, reveals the secrets of the one in ten entrepreneurs throughout the UK that have seen turnover increase by more than 50% over the pandemic.
These ‘Ten 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 Ten 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 ‘Ten 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 ten’.
Those that prospered also shared a belief that a movement towards a greener economy offered opportunity for business, as well as environmental benefits (72%).
Cloud computing (28%) and cyber security (28%) were the two technologies the top performing businesses planned to invest in over the next three years. A quarter (25%) planned to invest in e-commerce, the internet of things (25%) and big data and analytics (24%).
More than a third, 35 per cent of those that saw turnover increase by 50 per cent were in London. West Midlands was home to 11 per cent of high performing firms (+50% increase in turnover) the highest outside London, followed by the South East, and Yorkshire and the Humber at nine per cent.
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.
These include:
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 and SR allowances for those investing in greener plant and machinery.
The Ten Per cent, showcases the entrepreneurs who are driving business growth, despite the economic backdrop. They include Falmouth-based tech firm Data Duopoly co-founders Tanuvi Ethunandan and Erin Moss, who secured match funding from the European Space Agency and Aerospace Cornwall over lockdown; Chris Smylie, MD of Wirral-based grocery export firm Smylies which saw a 10 per cent leap in turnover in 2020 and the Medipharmacy Group, which opened a 9,000sq ft warehouse in East Grinstead and two new outlets in London over the pandemic.
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 that 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.”
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 small business network and business support provider 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.”
Tanuvi Ethunandan co-founder of Data Duopoly, said: “No one knows how they're going to react when there's such a big change. I think we learnt a lot by trying things and seeing what stuck. We took any opportunity that came our way. My advice to any founder would be, just think about what your client needs. If you can help them, and provide value, then you will be rewarded."
About the Enterprise Trust
The Enterprise Trust was launched in 2011 by Richard Harpin, the entrepreneur behind the UK’s leading home repairs and improvements business HomeServe, now a FTSE 250 company valued at more than £4bn. The charity is run by Helen Booth and aims to create an impact and leave a legacy by helping individuals from all backgrounds to realise their potential as independent wealth generators. In 2020 the charity launched a research arm to extend its reach and provide important insight, new thinking and evidence-based problem-solving around the key issues affecting the UK’s small business community.
About Enterprise Nation
Enterprise Nation (https://www.enterprisenation.com/) is the UK’s leading small business network and business support provider delivering support to more than 50,000 small businesses every month. Its aim is to help people turn their good ideas into great businesses – through expert advice (including a comprehensive resources library), events, acceleration support and networking. In 2020 it launched two high profile business support initiatives: the Amazon Small Business Accelerator and the Recovery Advice for Business scheme which collectively aim to support thousands of small firms impacted by the pandemic.
Enterprise Nation’s small business active membership grew by 34 per cent in 2020. It now has more than 120,000 members and subscribers, ten per cent of which are professional advisers from a range of sectors offering strategic support to small firms. The adviser platform sees hundreds of connections every week with small firms reaching out for advice.
Enterprise Nation was founded in 2005 by British entrepreneur Emma Jones CBE, also co-founder of national enterprise campaign StartUp Britain. She is author of best-selling business books including Spare Room Startup, Working 5 to 9, Go Global, Start a Business for £99 and the StartUp Kit, Going for Growth. She is a frequently called-on and regular media commentator on a range of issues which affect the UK’s growing number of SMEs. In 2018 FTSE 100 entrepreneur and HomeServe founder Richard Harpin invested in Enterprise Nation with the aim of creating a ‘more entrepreneurial Britain’.
Notes to editors
The one in ten statistic tallies with other research including the ONS, Innovate UK and the ERC, Beauhurst and a Harvard Business Review which studies 5,000 businesses over three recessions.
The report was written by Jaime Tinker, a Business Researcher and Market Intelligence Analyst at Falmouth University.
*The survey was conducted by award-winning strategic insight agency Opinium amongst 500 businesses that saw turnover increase over the pandemic, between May 7 and 14.
Report findings at a glance
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% have built new partnerships
19% have 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
42% say flexible working is the change that businesses are most likely to make permanent
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 green economy as opportunity
80% of those that did well had implemented changes before the end of March 2020
About Santander
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 31 June 2021, the bank had around 20,900 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers’ eligible deposits are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
At Santander, we’re passionate about helping ambitious businesses fulfil their potential. We have a wide range of services that will give you the support you need as you seek to accelerate your business’s growth. From advice and expertise to practical assistance such as finance for organic expansion, mergers and acquisitions activity or working capital, we can help turn your vision of the future into reality. All products and services are subject to eligibility, status, terms and conditions and availability. More information is available on our website www.santander.co.uk/business.
Notes to editors:
The one in ten statistic tallies with other research including the ONS, Innovate UK and the ERC, Beauhurst and a Harvard Business Review which studies 5,000 businesses over three recessions.
The report was written by Jaime Tinker, a Business Researcher and Market Intelligence Analyst at Falmouth University.
*The survey was conducted by award-winning strategic insight agency Opinium amongst 500 businesses that saw turnover increase over the pandemic, between May 7 and 14.
Case studies
Data Duopoly
Tanuvi Ethunandan and Erin Moss, co-founders, Falmouth
Data Duopoly secured match funding from the European Space Agency and Aerospace Cornwall and from raising seed round funding for £250,000 by showcasing the relevancy and scalability of the product.
Tanuvi said: “We thought this was the perfect opportunity to launch and pivot at the same time. Before COVID-19 hit, we were providing a gamified experience, but it became so much more. We were already providing the data analysis to venues, tracking and monitoring where visitors were to give them a live heat map.
“We thought, why don't we give that information to the visitor as well? So, when you click on an exhibit in our app, it will say this area is really busy right now and nudge them somewhere else. Everyone gets personalised suggestions, so we're aiding with social distancing – helping venues recover as well giving people the confidence to enjoy their day out.
Medipharmacy Group, East Grinstead
Director Sandeep Khosler
Over the pandemic, the Medipharmacy Group opened a brand new 9,000sq ft warehouse and head office in East Grinstead. It also acquired two new independents one in Putney and the other in Purley, taking its chain to 22 South London chemist shops and its employees to 150.
The chemist chain had a pre-existing advantage: It had introduced the award-winning Medipharmacy app in 2018 which allowed regular patients to order more easily. That added to its existing free delivery service which meant it was able to easily cope with the increased demand the pandemic brought.
Sandeep Khosla, director, said: “We realised early on we needed to be able to compete against big chains. It gave us a unique offering to patients and set us apart from our competitors.”
https://www.medipharmacygroup.co.uk
Smylies, Wirral
Smylies, which ships best-loved British products like Weetabix and Heinz Beans to supermarkets and outlets supplying ex-pats around the world, saw more than 10 per cent growth over the pandemic with a projected £28m turnover.
Yet in early 2020, the firm was subject to the same restrictions on goods, including toiletries and cleaning products, that we saw plague British supermarkets. Add to that the issue of international shipping – flights such as Emirates which had played a key role in Smylies’ export strategy to the UAE, for example, were grounded.
Chris said: “Three years before the pandemic, we had invested three quarters of a million pounds in a new IT system including an automated warehouse stock management system and increased e-commerce functionality with an industry-leading online ordering system.
“Two years ago, we started working with a management consultancy firm which gave our management teams a restructure, so we’ve now got better layering in the business.
“These were timely improvements in place when then pandemic hit and without these we wouldn’t have been able to cope, but they were part of a wider strategy to make sure the business was in the best shape to hit our growth targets.”