A new study, Growth Challenges for Small and Medium-sized Enterprises:  A UK-US Comparative Study,  by Professors at Babson College, USA , and Kingston University, Surrey, UK,  found that high-growth small and medium-sized enterprises (SMEs) expand at different rates, in different patterns, and travel on very different paths.  There is no single or common growth pathway.  There is no normal curve.

High growth firms are rarities among (SMEs).  Still, growth expectation for these entrepreneurial ventures was assumed to be on a steadily rising curve.

What’s behind the differences?   In their report, researchers observed a variety of factors that contributed to the acceleration of high-growth SMEs in both the United States and the United Kingdom.  They found that choices made by high growth SMEs—based on management ability, capability, and accessibility—were the distinguishing dynamics. And it was the quality of the business owner’s vision, strategy, and direction that charted the course to successful growth.

“Our study confirms the importance of management skills in growing SMEs,” says researcher and Babson Professor Candida Brush, Chair, Entrepreneurship Division, Babson College. “It was the ability of the business owner to carry out and manage the company’s goals that often determined successful growth.” Brush also stressed that external industry, market, and economic forces act like waves moving a company forward or backward on its strategic path.

The study also noted differences among SMEs’ intentions for growth and actual outcomes. Four distinct patterns of growth were defined:  rapid growth pattern, incremental growth pattern, episodic growth pattern, and plateau growth pattern.

Three critical components—management, marketing, and money—were key in stimulating growth across these patterns.

Methodology

The study presents data on two samples of owner-managers from 20 fast growth enterprises in the UK—IT, financial services, business and professional services, electronics, engineering-- and 19 in the US.  To request a copy of the full report, contact Professor Brush at:  cbrush@babson.edu