Your business has been going well and you've decided it is time to take it to the next level. Before you do anything, make sure you are truly ready to scale up and are not running before you can walk. Is the demand for your product enough to sustain growth? First thing you need to do is assess where the growth will come from – new customers, new sectors or new markets. I would advise focusing on just one of these areas at a time.
Make sure you focus on your growth strategy; planning is central to success. Have a vision of where you want to get to and make sure you think ahead, not just focus on tomorrow. There will be twists and turns along the way but as a business owner you need to be flexible enough to deal with these. Without long-term goals and visions to work towards, your company simply won't be scaleable. Spend time thinking about what makes your business proposition unique. What is attractive about you to your customers, what value do you add and what are they looking for? Don't compromise on what you offer: too many ventures forget what helped them to get to where they are in the first place.
It can be difficult to scale up without extra finance, so it is vital you spend time analysing your business, seeing what you do well but more importantly where you need to improve. Certain inefficiencies may be things you can get away with in the early stages of your business, but if you are serious about growing and scaling up, these issues will have to be ironed out. Sometimes the key to scaling up can be scaling down, making sure you do things as well and as efficiently as possible.
If you decide you need extra finance there are plenty of options out there. As you will, hopefully, know from my previous blogs, I'm chairman of Start Up Loans, a government-funded initiative that offers financial support to businesses that have been trading for up to 12 months. Other options to look at include bank loans, crowdfunding, angel investment, invoice financing and community funds. You can read my earlier blog on the key to successful second phase funding.
Another factor to take into consideration is whether you have the right expertise or experience at your business: if you don't you will need to bring people on board. Anybody you bring into your business, particularly at a senior level, should have the ability to take the company to new heights. Get new hires to do the day-to-day activity and you can concentrate on the strategic side of things – by moving away from the noise you can focus on moving forward. It can be hard to delegate work and not try to do everything yourself. You've put your blood, sweat and tears into the business and it's only natural to want to protect it. If you can't afford to pay someone, why not consider sharing equity? I've done it many times and it means the new recruit has even more incentive to help you grow the business.
Finally, if you find the growth strategy isn't going as well as you hoped, stop before you lose too much. There will be other opportunities to grow but you don't want to carry on burning capital on something that doesn't work.
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James Caan is chairman of the Start Up Loans Company. Each fortnight he tackles a different business issue. We welcome your suggestions for future topics and questions regarding your own business – please share them in the comments thread below.
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