The Great British Entrepreneur Scale-Up Conference will attract an audience of 500 founders, entrepreneurs and business owners from ambitious businesses.
Working in association with Coutts, NatWest and RBS alongside significant partners and the media the inaugural Scale-Up Conference will take place in Central London on 20th November 2017 touching upon several areas of how to scale up your business from experienced entrepreneurs. Carl Reader, author of The Start Up Coach, co-owner of dennisandturnbull.com discusses the four pillars of scaling a business.
Once a business has proved viable, and you’re ready for more, it could be time to think about scaling your business. Some businesses have had this in their vision from the very start; for others this stage comes almost as a surprise. This is a common issue I come across, and it’s important to note that there isn’t one magic answer, no “right way” to grow a business. Every business has its own unique factors to consider, and certain methods of growth are ideal for some but not for others.
That said, there are four key foundations that every scaling business has to get right. If one of the foundations isn’t stable, scaling will be a rocky journey and it’s unlikely to be successful, so make sure you’ve put the relevant wheels in motion and support systems in place to avoid the most common pitfalls.
Pillar 1: Suitable funding
It’s unlikely that growth will happen without some kind of investment. Look closely at your revenue streams, ensure your business plan is up-to-date and future-facing, and be able to demonstrate how any investors in the business, whether that’s you, external debt funders like the bank, or equity funders – can get a payback from it. Don’t just look at the money though – investors can bring far more to the table than just cash.
Some businesses, particularly in the technology sector, look towards angel investors and venture capital investors to provide funding for accelerated growth. While all are great funding sources, bear in mind that the investors will be looking for a very strong business with a strong plan in place. They will also look for a plan that allows them to execute an exit plan with a reasonable chance of success.
Pillar 2: The right team
Only when the right people are on board can a business scale. It is likely (but not a requirement) that you’ll need to hire more people as you grow – make ensure you choose staff that are right for your operation. This is usually the most difficult of the pillars; transitioning from managing a team of 10 to a team of 1,000 is difficult for any entrepreneur, and letting go of various functions is the biggest challenge that most seem to encounter. If you’ve got the right people in place, trust them to do the job. Your business should be able to function without you – and must, in order to be truly scaleable. While you might find the idea that your business can thrive without you difficult to swallow, it’s a sure sign that your business has effective systems and a great team in place – and therefore you’re in a great position to scale up.
Pillar 3: Their growth model
Many people tend towards the organic growth route, based on their marketing efforts together with referrals from existing customers. With inflation, this leads to organic growth, provided of course that the number of new customers exceeds the number of customers that stop using the business. Other options exist, of course, such as mergers and acquisitions, licensing and franchising. Whatever route you choose, you should take professional impartial advice to make sure that the route that you consider is appropriate for you and your business, and to understand the financial and business implications of the growth. For example, business format franchising works very well for retailers and consumer service businesses, but is a bit more difficult for professional service organisations due to the levels of training required.
Pillar 4: A sizeable but attainable market
As it says on the tin – ensure your target market is appropriate for your vision. Are there any tweaks or adjustments you need to make to ensure you can tap in to the right market? Do your research, and have a clear plan in place for what you want to achieve and how you are going to reach it. Be ambitious, but realistic.
It’s essential that these 4 foundations are underpinned by a crystal clear, strong vision, which runs through everything you do in your business like a stick of rock. This laser-sharp vision will give you strength, direction, and a clear understanding of what your business is capable of achieving.
Always bear in mind that the nature of your role as a business owner is inevitably going to change as the business grows. As your team grows, so will the role expected from you. You will find that while in the early days you had a personal relationship with every staff member, this will later be taken on by the management team and you will be more detached from the day to day operations of the business.
Every business is different, and has their own individual path towards growth. What works for one will not necessarily be a success for another business – don’t believe the hype about any shortcuts. With a crystal clear vision for your business, concentrate on getting your four pillars concreted in, and you’ll have a firm foundation for growth.
For more information on the The Great British Entrepreneur Scale-Up Conference visit here.