Scaling Borders Veroniek Collewaert, founder of the European Scale-Up Institute, shares her tips for British entrepreneurs.

As the effects of Brexit continue to ripple through the business landscape, UK entrepreneurs are increasingly turning their gaze towards Europe in search of growth opportunities. The decision to expand into European markets is not merely a tactical choice; it represents a strategic pivot that many founders hope will counterbalance the uncertainties and challenges brought about by the UK's exit from the European Union. Yet, the journey across the Channel comes with its own set of challenges that require careful navigation and strategic foresight.

The premature scaling dilemma
In a revealing discussion with Entrepreneur UK, Veroniek Collewaert, a professor at Vlerick Business School and founder of the European Scale-Up Institute, warns that the temptation to scale prematurely can be a costly mistake.

"One of the worst things you can do is start scaling when you actually haven't yet figured out the core of your business model….if you're still struggling with some of those life existential questions, you run the risk that you're going to copy paste the errors rather than the successes," she cautions.

This sentiment underscores a crucial lesson for founders: understanding all your business's foundations is essential before venturing into new markets. Scaling without a solid foundation can lead to a series of missteps that not only hinder growth but may also jeopardise the very existence of the business.

Collewaert's perspective serves as a reminder that entrepreneurs must first achieve clarity on their unique value propositions, customer segments, and operational efficiencies before setting their sights on international markets. The foundation laid during the early stages of a business is critical; without it, any attempts to scale can become precarious and fraught with risk.

Understanding the challenges
Collewaert highlights that while challenges such as talent acquisition and funding are shared across Europe, UK entrepreneurs face specific difficulties related to market access.

"In the UK, market access has been the top challenge for the last three years," she notes, stressing the need for entrepreneurs to adapt to a more fragmented European landscape.

The European market is characterised by its diversity—culturally, economically, and politically. This fragmentation requires UK founders to be agile and adaptable in their strategies. Each country within Europe has its own regulatory environment, customer preferences, and competitive dynamics, which can complicate market entry for businesses used to operating in a more homogenous UK market.

Collewaert's insights offer UK entrepreneurs a roadmap for navigating these complexities, emphasising the importance of a tailored approach to market entry. By adopting a mindset of experimentation and localised research, founders can better understand customer needs and cultural nuances, enhancing their chances of success in diverse markets.

"Even though you're scaling, when you want to enter a new market, you need to put your startup hats on again," she advises. "Experimentation and research are key. You have to ask: Are those customers the same as we have back home? Do we need to adapt our messaging?" This approach highlights the significance of conducting thorough market research and engaging with local partners who possess insights into customer behaviours and preferences.

The role of government agencies
Collewaert emphasises the vital role of government agencies in facilitating international partnerships. "Departments like the one for international trade in the UK have a huge responsibility," she says. "They need to ensure that UK firms can swiftly establish partnerships with companies in mainland Europe." UK entrepreneurs should actively tap into these resources to effectively navigate the complexities of scaling their businesses abroad.

Moreover, collaboration between private businesses and government entities can create a robust support system for entrepreneurs. Government agencies can provide access to invaluable resources, including funding opportunities, networking events, and workshops that focus on international trade and market entry strategies. By leveraging these resources, entrepreneurs can enhance their competitiveness, gain insights into foreign markets, and develop strategic alliances that drive growth. Ultimately, fostering strong partnerships with government bodies is essential for UK firms aiming to thrive in a globalised economy.

Funding beyond venture capital
When it comes to funding, Collewaert points out a common misconception among entrepreneurs: "It's not all about venture capital and private equity. There are plenty of other funding options out there, like debt." By broadening their understanding of funding sources, UK founders can better position themselves for growth.

Many entrepreneurs often equate scaling with securing venture capital, overlooking alternative funding mechanisms that could suit their business needs. Options such as government grants, crowdfunding, and strategic partnerships can provide necessary capital without diluting ownership.

Navigating talent acquisition
Talent acquisition is another area of concern. "We really struggle to place students in the UK because of visa issues," Collewaert explains, noting that awareness of initiatives like the Scale-Up Visa launched last year is crucial. "There needs to be way more activity in terms of ensuring that both talent and scale-ups know about this visa. If not, it's not going to be used."

The landscape of talent acquisition has transformed dramatically post-Brexit, with increased competition for skilled professionals. UK businesses must not only work to attract talent from Europe but also ensure they are offering competitive packages that highlight the benefits of working for their company, such as flexible working arrangements and opportunities for professional development.

Collewaert points to UK companies like Revolut as exemplary models of successful scaling. "Revolut has a global mindset from the beginning and leverages economies of scale," she states. Their ability to add new features quickly—such as subscription services and cryptocurrency options—illustrates the importance of adaptability in a competitive landscape. "The more you can replicate your business model in different markets, the easier it is to scale," she adds.

In the wake of Brexit, UK entrepreneurs may be hesitant about their international prospects. However, Collewaert remains optimistic about funding opportunities available within the UK. "I see a lot of mainland European scale-ups wanting to move to the UK because of the robust VC landscape," she states, suggesting that UK founders might still find fertile ground at home.

Looking ahead, Collewaert identifies key areas for UK scale-ups to explore: "The Green Deal in Europe presents opportunities for clean tech and energy-related innovations. Additionally, there's a growing demand for remote healthcare solutions." These sectors not only highlight the potential for profitable ventures but also underscore the importance of sustainability and technological advancement in driving economic growth.

Collewaert's insights reveal that while UK entrepreneurs face distinct challenges when scaling in Europe, such as regulatory hurdles and cultural differences, understanding the landscape, leveraging available resources, and focusing on solid business practices can pave the way for success. "Despite the political barriers, scaling is something that isn't restricted by borders," she concludes. "We need to foster collaboration to help companies grow, no matter where they are based."

In a climate of uncertainty, these insights offer a crucial roadmap for UK entrepreneurs seeking to thrive in the competitive European market. By adopting these strategies and learning from the experiences of successful scale-ups, they can better position themselves for successful expansion, turning challenges into opportunities for growth across the continent.

Furthermore, by establishing strategic partnerships and networks, entrepreneurs can enhance their market presence, gain access to vital industry knowledge, and navigate the complexities of cross-border operations more effectively. Ultimately, embracing innovation and collaboration will be key to sustaining long-term growth and success in an ever-evolving marketplace.