Throughout my career in business and marketing, I’ve seen the different journeys of small business owners (SBOs) across the UK and Europe. While some have gone on to be international successes, others have ceased trading amid circumstances such as the cost-of-living crisis. Over this time, it has become clear to me that greater support is needed for SBOs to achieve their long-term growth goals. The House of Lords Communications and Digital Committee recently warned that the UK risks becoming an ‘incubator economy’ if action is not taken to help tech companies scaleup. However, bridging the scaleup gap needs to be addressed across all business sectors. Supporting small businesses, irrespective of the industry they operate in, and giving them the financial support and tools to grow, is key as we look to unlock the nation’s future economic growth.

Unpacking the scaleup challenge

SBOs are facing significant growth barriers in the current economic climate. For many, the focus is on simply staying afloat – the idea of actually growing their business can seem far away.

VistaPrint’s recent research shows that the greatest challenges currently impacting business growth are all related to finances – rising material costs (39%), limited access to finance (32%), and high marketing expenses (26%).

In the UK, SBOs face additional challenges when scaling their business. Since the Covid-19 pandemic, it has been increasingly difficult for these businesses to access capital. A recent call to evidence from the Department of Business and Trade noted that overall loan success rates are low in the UK following a lapse in investor confidence during Covid. Loan success rates less than 50% on average – down from a pre-pandemic rate of 67% in 2019. This limited access to finance, difficulties in recruiting highly sought-after tech talent, and a risk-averse investment culture have created a tricky environment for businesses to expand in.

How the small business ecosystem can help entrepreneurs overcome these barriers 

Recent research shows that 41% of Brits would like to start their business but 26% are waiting for the conditions to be right before doing so.

So how can these aspirations be realised? That’s where the rest of the small business ecosystem comes into play. Tackling the lack of funding is the first factor which can be addressed. While there are options for early-stage finance – including that first leg-up from family members – access to grants and funding can give SBOs a greater chance to obtain the capital needed to scaleup. It’s more than just access to funding, it’s also about knowing where to find them. That’s why education is also key – so business owners are equipped with knowledge about where and how to secure financing and utilise tools for growth effectively.

Additionally, fostering networking opportunities and mentorship can help entrepreneurs gain valuable insights, guidance, and connections to navigate challenges and drive business success.

There are hundreds of these groups available, some of which are doing fantastic work. Take, Freelance Mum, who recently won our Realising the Remarkable programme with Enterprise Nation. Freelance Mum is a Bristol-based networking community for mums in business which has supported over 1000 mothers, providing networking opportunities while mitigating childcare needs. Often, the support is there, it is more about knowing where to find these groups and how to get involved.

Unresolved resilience

Despite these challenges, SBOs have proven resilient. In the face of economic uncertainty, they have had to stay agile, adapt quickly to change, and make difficult decisions to strengthen and grow their businesses to the next level.

Encouragingly, it is younger generations who seem the most undeterred by the economic environment. Our research found that a fifth of 18-24-year-olds (20%) and 25-34-year-olds (21%) thought 2024 was the best year for business growth in the past five years. As geopolitical and economic instability continues, this perseverance and positive attitude will be crucial in driving long-term business success and economic recovery.

Edging towards a scaleup nation

So, what does the future hold for small businesses in the UK and how can we support them to scaleup? While the optimism and resilience of small business owners is encouraging, real change requires tangible support. To drive long-term success, we must nurture this entrepreneurial spirit and provide both current and aspiring SBOs with the resources, funding, and guidance they need to grow. Ensuring their success is not just beneficial for individual businesses – it is in the best interest of the entire UK economy and beyond.

Sabine Leveiller is VistaPrint's VP of Marketing for Europe. 

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