Founders underestimate the pressure of scaling up, study finds

A majority of UK founders underestimate the emotional and financial pressures involved in scaling their businesses from small to mid-sized operations, according to new research from Shawbrook, highlighting the hidden strain behind one of the country’s strongest-performing segments of the economy.

Britain’s medium-sized businesses, often described as the “growth engine” of the economy, continue to outperform on productivity and job creation. However, the study suggests that rapid expansion frequently comes at a personal and financial cost for business leaders. Seven in ten founders said they were unprepared for the demands of scaling, while nearly three in ten (28%) reported experiencing periods of isolation during their growth journey. A similar proportion said stress levels increased as operational complexity grew.

The research also points to the extent of personal financial risk taken on by founders. Two-thirds (67%) said they used personal savings or remortgaged their homes to fund expansion. While 69% acknowledged that the financial risks of scaling were greater than expected, many ultimately saw positive outcomes, with 65% reporting that revenue growth eventually outpaced rising costs.

Despite this, access to appropriate finance remains a significant challenge. More than a quarter of respondents (28%) said they struggled to secure funding that matched their stage of growth. The findings suggest a gap in specialist support for medium-sized businesses, which are often too large to benefit from start-up schemes but too small to attract the attention of traditional corporate banking services.

Founders identified several types of support that could make scaling more sustainable. Thirty per cent cited the need for tailored finance or funding, while the same proportion pointed to peer networks or peer support groups. Mentorship or external advisers were highlighted by 29% of respondents, and 28% said mental health or resilience resources would be beneficial.

Neil Rudge, Chief Banking Officer for Commercial at Shawbrook, said the findings underline both the ambition of UK entrepreneurs and the need for more targeted support.

“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.”