In my last article I covered the top tips on building a business from scratch ie. bootstrapping it with your own cash, I hope you found the insights useful.
Now I’m going to talk about when you get to a business going over the multi-million pound mark and how you continue to grow that and bootstrap that under your own guise.
Continue to work with your bank or move to a new one:
When our business really started to grow I was always talking to my bank about our expansion strategies and what we needed to keep the momentum going. It really does help to use the bank’s cash to grow the business. Unfortunately, my bank at the time really wasn’t willing to go any further, or, as they were honest enough to tell me, they couldn’t support a business of our size anymore, that I needed to perhaps go to larger banks. When you get to a certain threshold, make sure that you’re working with a bank that can offer you different facilities, such as invoice finance, trade finance, or an overdraft. Many of these things may not be top of mind initially , but you will need them once your business grows and you’re having to buy goods well in advance, or you’re waiting for those retailers with longer terms to pay you and you need access to that cash.
Watch your overheads:
As we continue to grow the business you’ll feel the need to keep adding team members, growing office size, and spending higher amounts on what you believe to be quality services. Question yourself, do you really need extra team members? Do you need the office size? Do you need to spend extra money on the services? Sometimes we can get all caught up because our business is growing and we feel the need to have swanky offices, large teams and fancy agencies. Whilst I’m not doubting that some of these things you do need, keep an eye on your overheads.
Consider your systems:
Whilst I said you need to keep an eye on your overheads, and please believe me I do think you need a great team, another point to consider is building or purchasing a great enterprise system, sometimes known as an ERP service. We started working on an ERP a couple of years ago and this gave us great insights on our business and how it was running, simply at the touch of a button. This would tell us the available stock in our various warehouses, what we were selling, and give us great detail, taking out a lot of the complexity that we would have to keep in and update in our spreadsheets. Having great systems can really give you the forward planning detail and also save you thousands of pounds worth of cash in hires and knowledge. I highly recommend you do this, and there are ERP systems to suit all types of businesses.
Is it time to seek investment?
Like many businesses, at the size we had got to, we decided it was time to seek investment. We weren’t just looking at this for ourselves, we were looking for money for the company and what is called smart money – an investor that can provide cash for the business, as well as knowledge about the industry we’re in, creating many shortcuts so that we can get to our goals sooner rather than later. We’re not looking to sell, we’re just looking for knowledge to drive our brand forward.
I highly recommend that you seek the advice of an investment broker who will have all the contacts in the industry you’re in to help find the relevant investor. Their knowledge throughout this process is very powerful, they will help you build your business plan, your decks and also make sure you get the best deal possible now and in the future.
To summarise, navigating the journey of bootstrapping a larger business beyond the multi-million pound mark demands money management and forward thinking. Whether it’s choosing the right bank, keeping a close eye on expenses, or investing in efficient systems, every decision counts. And when it’s time to consider outside investment, it’s not just about the cash but also about finding the right partner who brings industry knowledge to the table. By embracing these tips, entrepreneurs can pave a smoother path to growth, ensuring their businesses thrive well beyond the early stages.
