Taking your business from start-up to scale-up in five steps

Scale-ups are the engine drivers of local and national economies, driving innovation and creating high quality jobs and apprenticeships.

start-up to scale-up

Scale-ups are the engine drivers of local and national economies, driving innovation and creating high quality jobs and apprenticeships. 

According to the ScaleUp Institute, they are on average 42% more productive than start-up enterprises and larger firms, and are generally defined as businesses which increase turnover and/or employee numbers by more than 20% over a three-year period.

Despite the huge contributions these businesses make, transitioning from a burgeoning start-up into an expanding scale-up can present a number of challenges, especially if the business is unprepared for this growth.

This significant transition calls for a different approach to that of first getting the business off the ground in the start-up phase, as well as adequate planning and preparation. 

Here are some key factors to consider when planning the next phase of your business, to ensure you have the right infrastructure and resources to succeed.

Define leadership roles

It is completely normal in the early stages of a business for either a small team or individual to be responsible for a host of functions. 

While this is vital when you are still gaining traction, as you begin to expand, you must start to consider how you will define roles and teams to divide responsibilities and functions to increase operational efficiency.

It may very well be painful as an entrepreneur to relinquish control over certain aspects of the day-to-day running of your business, but recognising your own limitations is important in achieving significant business growth. Building a scalable, corporate structure means allowing people to take on management and leadership roles, while you focus on the direction of the business.

Structure systems and processes

Sustainable growth requires clearly defining the systems and procedures of the major functions within your business. Not only does this increase efficiency, but it keeps the focus on driving the business forward, meaning you can more easily replicate your onboarding process of new hires.

Formally defining your systems and processes also gives you a chance to identify where you can automate repetitive and time-consuming tasks. Key functions such as certain aspects of marketing campaigns or administrative tasks such as payroll can all be automated and optimised.

As you establish these processes, ensure they are documented, easily accessible and understandable, so they can be replicated through the entire business.

Stress test the business model

As you grow your customer base and onboard new employees, its necessary to ensure that your operating model is fit for purpose.

Having a strategy in place and considering the impact that growth will have on both the running of your business and the resources you have available to you is vital to a smooth transition.

Cashflow is the lifeblood of your business, so naturally your priority should be to ensure you have the necessary financial foundations in place to handle increases in costs and other expenses associated with a growing firm. Planning for future growth early on, including employees, inventory space and finance, will mean addressing these issues before they become debilitating and endanger your expansion.

Invest in company culture

Establishing a business that is successful in the long-term means attracting and retaining the best possible talent, and the most effective way to do this is by having a positive company culture.

Finding the right employees can be a huge cost to the business, so having a well-defined culture within your organisation will help you identify candidates who personify these values, and can grow and develop with the business. Beginning to strategically manage human resources as your company starts to expand will pay off in the long run, and ensure you keep the right people for your business.

Diversify revenue streams

Your firm should not live or die by a small handful of clients or customers, and as you start to grow, it is crucial that you do not become over-dependent on a single customer or client for the bulk of your revenues.

Scaling a company successfully means constantly being on the lookout to diversify your customer base and develop new business. This likewise applies to your revenue streams. In competitive industries, it is vital to develop new products and services that give you a competitive edge, and future proof the earning potential of your business during uncertain times.

Final thoughts

It is natural that a company will experience growing pains as it makes the transition from a small start-up to a dynamic scale-up. Being prepared to make the necessary changes, and having a strategy in place early on will make the transition far smoother, and ensure you are expanding in the right direction.

Rob Stone
Rob Stone

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