Growing your business? 7 Scale-up tips

Thursday, 05 December 2019

Scaling up your business sounds fantastic: it suggests Silicon Valley dynamism, entrepreneurial flash and soon-to-be-unicorn-sized global dominance. However, launching a firm is the easy part. Scaling up (defined by the OECD as an enterprise with 20 per cent average annual growth in employees or turnover over three years), however, involves sleepless nights, moments of can’t-pay-the-rent panic and firing off 200 tweets a day to let people know you exist. It’s tough.

 

Sadly, it’s even tougher if you’re female. Women’s businesses have a lower longevity rate than those set up by men, according to a Deloitte report published earlier this year. Male-led SMEs are also five times more likely to reach a £1m turnover than their female counterparts, according to another 2019 report, by the Rose Review. This is partly due to systemic issues (women are twice as likely as men to cite family responsibilities as a barrier to starting a business) and age-old perceived bias (a University of California/Harvard study found female names, pictures or voices reduce the chances of receiving investment).

 

But by having a strategic think about what you’d like to achieve, along with accessing the plethora of new funding opportunities, it’s possible to overcome these barriers. From embracing flexible working to sorting out your supply chain, here’s how to build your business…

 

1 Explore alternative funding

 

Until recently, the only way you could secure more money for your fledgling firm was to have wealthy relatives or beg for a loan in a bank manager’s office. Today, however, there’s a plethora of options.  

 

The government-backed British Business Bank (british-business-bank.co.uk) works with financiers to provide £10bn of money to small businesses. Local authorities and agencies also offer grants, such as those available through Local Enterprise Partnerships (LEPs; lepnetwork.net) or the £3.2bn Regional Growth Funding.

 

Peer-to-peer lending sites such as Funding Circle (fundingcircle.com) can put you in touch with private investors, while you could search for your own angel investor (a wealthy individual who provides capital in return for equity) on the UK Business Angels Association’s online directory (ukbaa.org.uk). You could also try an equity-based crowdfunding site such as Crowdcube (crowdcube.com) where backers make an investment in return for a stake in your business.

 

2 Recruit wisely

 

Getting the right people for your business is crucial. One of the first steps is to figure out the roles your company needs. If you can, prioritise growth: what positions are most likely to generate cash quickly (Salespeople? A marketing officer to spread the word?).

 

Next, decide on the <kind> of people you want. Establish a set of values for your company, and ensure anybody you employ fits in with your vision and culture. Don’t be wooed by LinkedIn profiles crammed with household-name companies: these organisations might be some of the world’s biggest companies, but how would they feel leaving the snug sanctuary of these jobs for a small startup?

 

Finally, seek out people with a different mindset to your own, as ‘Mills’ from £30m-turnover software studio Ustwo explains here: “When growing, we understood the value of having a diverse set of skills and backgrounds. As we expanded the types of thinkers we had in our business, our work got better.”

 

3 Streamline your tech

 

As your company expands, so will your technology. It’s not just a matter of having a shiny new website or splurging on a state-of-the-art 3D printer for the office. Investing in a process management system could be more beneficial. A process management system can centralise activities such as cashflow, invoicing, managing staff holidays and keeping tabs on inventory stocks. When these tasks (which let’s face it, can be boring) are automated, it frees up more time for you to focus on running the business. Popular software providers include Blue Prism (blueprism.com), UiPath (uipath.com) and Automation Anywhere (automationanywhere.com).      

 

4 Embrace flexible working

 

Moving to an office may give your nascent firm credibility, but with lease charges, business rates and utilities bills, it can be expensive too. However, the advent of agile working means there’s no real need to have a permanent base at all. The key benefit? You can add key members to your team when scaling up, without paying for an office space for them.

 

However, you will need razor-sharp organisational skills to make flexible working a success. Cloud technology can help here, such as Salesforce, Google Docs and Slack: it ensures your staff can work anywhere at all times – plus you can keep track of them too. Flexible working also means managing employees’ schedules (for example, you’ll know that Kevin shouldn’t be allocated deadline-related tasks when he’s on the school run, for instance).

 

5 Think global

 

One of the most effective ways to accelerate growth is appealing to overseas markets. Strike upon the right country, and international trade is a wonderful chance to double – or even triple – your turnover. Thanks to the globe being interconnected like never before, there’s been some unlikely British exports in recent years: Hampshire lemon curd to Asia; Cumbrian trout eggs to Kenya; there’s even one Wimbledon firm sending boomerangs for Australia.

 

For many small businesses, exporting overseas can be daunting. However, arranging a meeting with a Department of International Trade (DIT; gov.uk) adviser can reveal which markets will suit your product/service the best, plus tips on navigating bureaucracy, customs and local taxes.

 

6 Managing your supply chains

 

Your suppliers can make-or-break your business when scaling up. Imagine you’re a food business: a bad weather such as summer 2018 could ruin harvests, meaning your products may not reach your customers. Or say you’re importing goods from Europe: a continental truck strike could seriously hamper your business.

 

As an entrepreneur, you have no power over these external factors. But keeping on top of your supply chains means you can <plan> for them.

 

Use sales forecasts to predict the times of year when you might get high or low demand, and accommodate work-flow accordingly. Also, make sure you have a diverse supply chain, with back-up stock and an alternative supplier if unexpected events happen (if there’s a sudden demand for your product because a celebrity has tweeted about it, will you have enough stock to cope with the demand?). Also, conduct due diligence on any supplier you work with: you can peruse their latest statements on Companies House (beta.companieshouse.gov.uk) to assess how financially stable they are. And always have a Plan B in case things go wrong.

 

7 Seek help from investors and mentors

 

Scaling requires acquiring a whole new raft of skills. As your team expands from three to 30, you’ll find that you’re not just CEO, but finance officer, HR, marketing officer, salesperson, IT specialist and admin dogsbody too. The trouble is, people train or study for years for such roles. You haven’t.

 

It may feel like you’re struggling to cope, but a mentor (such as your investor) can help with building networks, important contacts, understanding international markets, or just be one WhatsApp message away anytime you have a minor freak-out.