The secrets to growth: Why Britain’s SME community is no different to Germany’s ‘Mittelstand’

There’s a movement sweeping the Germany economy. A powerhouse of SME growth that makes up 99% of Germany’s overall business economy. Over 3m of Germany’s businesses, making up the majority of the business landscape, are SME businesses – and are known as The Mittelstand. They, typically, have fewer than 500 employees and see annual revenues of up to 50 million Euros. However, it’s not the pure statistical categorisation that defines these businesses as being the Mittelstand.

It’s something much stronger, and much more important. It’s a complete business mindset. A business culture so unique that the results of all those in the group see massive national and often, international, growth. Their approach is based on innovation and according to Winfred Weber, professor of management at Mannheim University of Applied Sciences, many of these SMEs are already involved in export from the day they start to trade. “They are at the forefront of innovation, and find and define a niche, and then sell on an international level,” he says.

But when we take a more pragmatic look at just what these SMEs look like, we start to see some commonalities that develop, which underpin their entire business culture. Very often, these businesses are, as defined by business historians, as :

  • Family-owned, or exhibit a family-like corporate culture, and structure. The Mittelstand has employee turnover of less than 3% per year, and three-quarters of staff feel that their ideas are valued, according to recent book, The Seven Secrets of Germany.
  • They include generational continuity in their long-term business plan and plan for the future.
  • They have a very clear, very defined long-term focus
  • They are, mostly, entirely independent
  • Because they are independent, they are incredibly agile and flexible according to market needs.
  • They hold a strong emotional attachment to their vision, their belief, their mission, their clients and their teams.
  • Their hierarchies are lean – which means that there is a clear, and concise culture of ownership across the board.
  • They are driven by their customer needs – and are completely focussed on delivering what their customers expect
  • They are truly innovative and are geared to recognising opportunity and need
  • They have a strong, genuine, culture of social responsibility and believe in empowering their immediate communities.
  • They are proud of their regional ties and build upon these – despite their rate of growth internationally.

So, why is that relevant to the UK? Well, there’s a powerhouse of SME businesses driving the British Economy – in very much the same way. They are innovative, agile, independent organisations which offer national and international opportunity to the British economy. They are powerful, and are very quickly re-defining our economy structure. In Britain, it’s called the Brittelstand.

These businesses thrive on developing their workers’ skills through regular training and development, and the implementation of apprenticeship programs, and because they are focussed on the long-term, they recognise and know the value of long-term financial planning and funding; which is why, from the very creation of these businesses, they are already aware of, and planning for, potential exit and growth strategies – interestingly enough when you consider that the Mittelstand firms typically have some of the lowest debt ratios in the world.

We are, almost daily, seeing the fall of long-standing, seemingly-secure retail brands who have simply lost the ability to innovate, have built up structures that have sapped all option for agility, and have realised, far too late for most, that their point of turnaround has long-since passed. There is a re-invention happening all around us, and it’s being driven by a powerful SME economy completely fixated on growth.

And that’s why we are at the centre of their service-delivery, and operational infrastructure. We understand their world, and work with them to secure the financial growth they need. We bridge the gap between those wanting to grow, and the investment community. We work with large corporates who are looking to invest in the exciting, innovative, agile powerhouse that is the UK’s Brittelstand, through sourcing the best talent for their next investment opportunity.

If you’re not waking up to the opportunity that the British SME community offers, then you are at risk of becoming just another statistic.  Let’s prevent that. Talk to us today.

 

2018-04-12T09:48:52+00:00 April 12th, 2018|Corporate Venturing, News, SME Growth|0 Comments