Expanding your business can be a difficult and particularly crucial time for any company. Here are some of the most important factors that will affect your ability to scale successfully.
From selecting the right people to work with to ensuring a steady and secure cashflow, there are several factors to think about as you prepare to take your start-up to the next level.
Leadership: choosing the right people
Just as you want every member of staff to embody your company culture, it’s vital you identify the right personalities to run managerial positions. That means being patient. You might be desperate for an extra pair of hands or for someone to brainstorm ideas with, but hurrying to make a decision can have a detrimental impact on your business’s future.
Step back and think about the key professional and personal skills you need someone to bring to any position before you even start accepting applications. How will they fit into your business roadmap? What can they bring to the table that will help the company achieve its long-term goals? Should they have specific knowledge of your industry, or is experience of scaling up a company before more important?
Infrastructure: having the right systems in place
From investing in tech to streamline daily operations to hiring specialists to tighten up certain areas of the business, having comprehensive processes in place can make all the difference to the success of your scale-up.
It terms of IT, if you haven’t got the basics in place before you start growing, the little issues that were once easy enough to overlook will soon present themselves as big problems. Get your internal communications sorted, and ensure that any automated customer fulfilment, invoicing or inventory software is robust enough to take on an increase in volume. Similarly, as things get busier you’ll need to rely on data as opposed to anecdotal evidence from staff to get a real picture of what is going on in your business – and this means putting the appropriate management information systems in place.
You will need someone who can help you select the platform and software that will most benefit your business, as well as assess the way you currently operate and identify areas that can be improved.
Finance: Maintaining working capital
Working capital is a necessity when scaling, and rapid growth can put a huge amount of pressure on cashflow. Not only will you be spending more cash, you might also find that the way you work with suppliers and customers changes as the volume of orders you place and/or receive increases. Start-ups will need to explore different funding sources as they grow in size and scope.
You might have already received financial backing from friends and family, or through third-party investors. So, what other options are available to you?
Equity funding (such as private equity or venture capital) is an option, but can lead to companies compromising longer-term strategy in order to meet short-term repayment demands. You might also consider asset-based loans or other forms of alternative finance such as invoice finance, where you receive an advance on the invoices that are owed to you. This means your business can obtain cash immediately upon issuing an invoice, rather than waiting to be paid, and therefore frees up pressure on your cashflow.
Remember, scaling up is an exciting time. With careful consideration and forward planning, it is possible to grow into the company you always envisaged.
Check out our recent blog on the rise of the e-supermarket here.