Industry in the Midlands 2018, part 3: barriers to growth

Our three-part series looking at industry in the Midlands aims to give you facts and figures concerning key trends from 2017 and potential barriers to growth in 2018. What are some of the key metrics that might tell us how the Midlands is performing compared to other regions? Are there particular barriers to growth that might affect your business in 2018?

In the final instalment of our three-part series, we investigate potential barriers to growth for Midlands businesses. We’re also going to share examples of how some businesses have used Growth Street’s GrowthLine product to overcome some of these challenges. Could this give you some inspiration for your own growth plans this year? 

Skills shortages

The Greater Birmingham Chamber of Commerce’s latest economic review suggests that a couple of demographic factors contribute to a skills gap in certain sectors. A high proportion of the region’s workforce is under 25, while a relatively high proportion of its working age population has no formal qualifications (14.2%).

Meanwhile, businesses of all types may wish to pay close attention to developments as the Brexit process continues. Labour from the EU forms an important component of many manufacturers’ workforces in the UK.

Support for new businesses

Analysis from the Birmingham Chamber of Commerce indicates that there are a growing number of start-up businesses in the Midlands. Improving prospects for young companies could help to foster innovation and employment opportunities over the coming years.

Businesses overcoming barriers

Helping SMEs realise their economic potential could be critical for economic growth in the Midlands. Growth Street understand many of the challenges that SMEs face, including finding the right finance product. The following examples illustrate how this can be managed with our flagship finance product, GrowthLine.

Company A

Headquartered in Birmingham, this company is a hardware engineering and recycling business. They purchase boxes of returns and repairs from chains including Carphone Warehouse, Tesco Mobile, Vodafone etc. They then ‘spec’ up the phones with technicians and a quality assurer before selling them back in to retailers and/or wholesalers. As well as providing hardware, the business offers other products like mobile phone insurance.

Incorporated in 2011, the business employs 17 people, including 7 technicians - they have expanded their team significantly in the last 12 months. The director is a first-generation immigrant from Pakistan. The business came on board as a Growth Street borrower in the summer of 2017. They’ve used their facility to extend payment terms with suppliers. Their GrowthLine facility is currently around £100,000.

Company B

This Midlands company buys and sell valves and spare parts for valves. The valves themselves are used in heavy industrial machines, principally within the power/energy industry.

This business came on board with Growth Street in spring 2017. They’ve used our facility to  to increase stock (spare parts) and buy in new assets, namely larger industrial generators. They then sell these power sources on to larger UK businesses that wish to protect themselves against power outages. They’ve been able to set up a generator warehouse and sell the electricity itself back to the National Grid.

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In this series, we’ve summarised some key economic and investment trends, as well as examining potential barriers to growth. We hope you found this series useful.

Our GrowthLine provides flexible finance to help growing businesses manage cash flow and working capital. Remember, it works much like an overdraft: once we give you your facility limit, you can draw down funds and make repayments as often as you like in a given month. Could GrowthLine help you execute your 2018 growth plans? To find out, start your application now.

Head here to read the first instalment of our series on what 2018 might hold for industry in the Midlands, which deals with regional investment trends, and here for our second piece, focusing on economic trends.

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Written on in Business Insights