The true cost of scaling: majority of founders underestimate the pressures of moving from small to mid-sized business
Britain’s medium-sized businesses – the “growth engine” of the economy – are scaling at pace, but many founders say they were unprepared for the pressure that comes with expansion, according to new research from Shawbrook.
While the UK’s mid-market continues to outperform on productivity and job creation, the study highlights the human and financial strain that often sits behind that success. Nearly three in ten leaders (28%) reported moments of isolation during their scale-up journey and a similar proportion experienced higher stress levels as operational demands grew.
Many also invested heavily in their business’s potential. Two-thirds (67%) used personal savings or remortgaged to fund growth, showing the extent to which founders are backing the future of the UK’s mid-market. And although 69% conceded that the financial risks were greater than expected, strong commercial performance followed: 65% reported that revenue growth eventually outpaced rising costs.
However, access to suitable scale-up finance remains a friction point. More than a quarter (28%) said they struggled to secure funding aligned to their growth stage, pointing to a gap in specialist financial support for medium-sized businesses – a part of the economy often too large for start-up schemes but too small for corporate banking.
Founders highlighted several forms of support that would make scaling more sustainable, including:
- tailored finance or funding – 30%
- peer networks or peer support groups – 30%
- mentorship or external advisers – 29%
- mental health or resilience resources – 28%
Neil Rudge, chief banking officer for commercial at Shawbrook, said: “Medium-sized businesses are vital to the UK’s economic strength, and entrepreneurs are clearly willing to back their ambitions with significant personal commitment. Their success shows what is possible when businesses scale well – but it also highlights where more tailored support could unlock even greater growth.
“Access to flexible, specialist finance, combined with stronger peer and mentorship networks, can make the scale-up journey more sustainable for leaders and more productive for the economy.”