Most founders underestimate financial risks of scaling up, finds Shawbrook

Research from Shawbrook found most founders of medium-sized businesses in Britain were not ready for the pressure of scaling up. 

Three in 10 (28%) leaders said they felt isolated at times during the process, and a similar number reported higher stress as things got busier. 

Two-thirds (67%) put their own savings or remortgaged to back growth, showing how much personal commitment is involved. 

69% said the financial risks were bigger than expected, but most saw revenue growth eventually rise faster than costs, with 65% reporting revenue growth outpaced rising costs.

More than a quarter (28%) struggled to get funding that matched their stage of growth. 

Many said there is a lack of specialist financial support for medium-sized businesses, which are often too big for start-up schemes but too small for corporate banking.

Founders pointed to several forms of support that would help, including tailored finance, peer networks, mentorship, and mental health resources. 

30% wanted more tailored finance or funding, the same percantage asked for peer networks, 29% said mentorship or advisers would help, and 28% wanted mental health or resilience support.