The UK is full of successful new businesses, with more start-ups established per capita than in the US. However, many of these start-ups struggle when it comes to scaling up; reasons include not having the right people or resources in the business, poor processes, lack of finances or not having a growth strategy in place.
With that in mind, we take a look at what business owners need to consider when planning on scaling-up their business.
Set out a clear vision for the future
A business owner should have a clear idea of the direction they want their company to take in the future. Having a clear vision can, in turn, help influence long-term strategy, provide a framework of a plan on how to get there and is an essential step towards achieving growth.
Don’t try and scale-up too soon
Business owners should take a step back and assess the position they are currently in; attempting to scale-up prematurely is a common cause of business failure. However, if it’s clear that a business has outgrown its initial goals, greatly improved its efficiencies, exceeded its sales targets or is operating at full capacity, then the signs are there that it could be ready to scale-up.
Invest in the right people
Without the right team in place, scaling a business becomes a near impossible task. Business owners need to be willing to invest both time and money in recruiting employees with the necessary skills and experience, as well as up-skilling and training existing employees. Every single employee should have the skills and motivation needed to support the business through a period of scaling up and beyond.
Establish and maintain efficient processes
A truly scalable business is one that can adapt to an increased workload without compromising on performance or quality. Business owners need to assess their current systems and processes at this early stage and see where improvements in efficiency can be made. Once a business has efficient processes in place, scaling up without compromising on quality becomes much simpler.
Work on building strong relationships with third parties
Building and maintaining strong relationships with trusted third parties could provide many advantages when the time comes to scaling a business. These relationships could be with suppliers, distributors, service providers or partners. Strong business relationships can be mutually beneficial, allowing both parties to benefit financially from the scale-up. As well as this, by building strong relationships with third parties, business owners are gaining access to a wealth of experience, with some third parties becoming worthy and trusted advisors.
Focus on your strengths
When attempting to grow, it’s easy for businesses to fall into the trap of trying to do too much and spreading themselves too thinly. While this can seem like a good idea at the time, it can end up causing long lasting damage. Instead, businesses need to identify where their key strengths lie, and invest time and money into these areas.
Evaluate your finances
Scaling up will always involve a financial investment of some kind; this investment could be in new employees, improved processes or exploring new markets. Because of this, business owners need to forecast how much investment will be required to achieve their goals, and make sure they have the finances available to maintain a steady cashflow through this period. Alternative finance options can help businesses protect their cashflow during periods of growth.
Aldermore offers a range of alternative finance options designed to help SMEs fund their growth. To discover more about the different finance options available, get in touch with a member of our team.
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