Feature article:

A percentage is not a plan

---

Growth by default in UK private business

• Very few UK businesses reach significant scale. Of around 2.8m, only about 3% report turnover above £5m. In other words, one in 34, and that proportion has barely moved in nine years, pandemic years included.
• Nothing special happens at £5m, or at any other figure. Allowing for the unequal band widths, businesses thin out at the same rate at every scale. The data is national and high level, a series of snapshots. ONS, UK Business: Activity, Size and Location, Table 9, for anyone who wants to plot it.
• These businesses don’t fail. They stop. Most are still growing, at rates near inflation. Let’s call that growth by default: the rate a business arrives at when all the work went into the number and none into the company that would produce it.
• No two studies agree on why businesses stop growing. Finance, markets, talent, tax, energy, regulation: two recent UK surveys of much the same question produced entirely different orders of priority. That is what you’d expect if these were symptoms rather than causes.
• Because business finance speaks in percentages, growth gets planned in them too. But a percentage drawn from last year measures last year. It can state a target but not describe what has to be built to reach it, or what must start now to exist in three years, because those are decisions rather than measurements. Rate-first isn’t a weaker kind of planning. It isn’t planning.
• The alternative is to fix an end state first and work backwards from it. Most owners are never shown this as a method, so it isn’t a rejected option but an absent one. Meanwhile, the lead times for premises, senior hires, systems and accreditation all run to years, and a business looking 12 months ahead meets them too late, and in a hurry.
• A destination is the business described at scale, not a turnover figure. Once described, each route to it can be sized and checked before it’s chosen, which is the difference between a decision and a gamble. The question for 2027 isn’t how fast a business means to grow, but where it means to be at the end of 2030, and how it plans to get there.

Download the full report