Small and medium-sized businesses are a vital part of a healthy economy and the number of successful start-ups in the UK has grown steadily over the last years. Once they are established and stable, many entrepreneurs are eager to expand their offerings and grow their business.
In this article, Amy Roberts, business development manager at Spotcap, provides insight and advice on what entrepreneurs should consider before embarking on the scaling up challenge.
Know your business environment
Do your homework and make sure you have a good understanding of the industry and environment your business operates in. An initial SWOT analysis will help, so look at the strengths, weaknesses, opportunities and threats for your business when considering to expand.
In addition, ask yourself whether there is an increased demand for your product or service. Can you tap into a new customer base? How much additional funding is necessary? Do you need to hire new staff? Be honest to yourself and these findings will help you to make a grounded decision on whether it is the right time to scale up.
Find a suitable financing solution
Funding is a crucial element for businesses to achieve growth. Besides traditional bank loans and government initiatives you might be surprised to find out that there are a variety of alternative options fostered by digital innovation, which are available to help you raise capital, including online business lending, asset-based lending, co-financing and peer-to-peer lending.
It is important that you are aware of the different funding opportunities available to determine which financing solution suits your business needs best. And one more tip – don’t be shy to ask for help: even a short chat with your accountant or financial adviser might provide some much-needed clarity.
Speak to your staff
We all know that it is important to keep staff constantly engaged and motivated as it ensures the smooth running of your business. Keep this in mind when you plan to scale up as you run into the danger of putting your employees under increased pressure.
If properly communicated, your staff will understand that an increase in workload might be necessary in the short term. However, be aware that overworked employees get stressed much easier which negatively affects their ability to perform in the workplace. Therefore, ensure that you either make appropriate hires or temporarily outsource certain tasks or functions, i.e. hiring a freelancer.
Can technology help?
Innovation and digitalisation have quickly broken ground so consider using technology for certain parts of your business. For example, book keeping, invoicing and human resources can largely be automated nowadays. The right software can considerably lift the admin burden and give you and your staff the chance to invest time and expertise where it really matters.
Scaling up does not necessarily have to be a fast process and rushing through changes can negatively affect your bottom line. Many business owners choose a slower pace to ensure that all business functions are prepared and ready to deal with additional responsibilities and a growing number of clients. Finally, it is crucial that you are able to manage expectations and are prepared for pressure coming your way from customers (new and old), suppliers, as well as employees.
Scaling your business is exciting and, if done well, offers many rewards, so make sure that you, your staff and your business are prepared to move on to the next chapter.
Amy Roberts is a business development manager with Spotcap. Her focus is on adopting growth opportunities that allow Spotcap to provide UK SMEs with tailored finance. She was previously with iiPay, where she developed their network of global partners.