Scaling Up Stage

After successfully developing the business concept, navigating through the startup phase, and driving growth, you have accomplished a significant milestone as a business owner.

However, it's important to understand that growth brings its own set of challenges.
The concepts of business growth and scaling up are easily conflated. In the traditional growth phase, as your business expands, it demands more resources such as revenue, staff, and funds, which can potentially hinder its progress.

On the other hand, scaling up goes beyond mere growth by enabling your business to expand without being restricted by rising expenses.

While scaling up offers advantages, it also presents its unique challenges.

Discover the common hurdles that businesses face during the scaling-up journey:

Managing Rapid Growth

Rapid growth necessitates the expansion of your operations, and it’s tempting to fuel this by recruiting more staff and creating more roles.

But for each productivity boost this method promises, you should subtract expenses like salaries, national insurance, pension contributions, sick leave, software licenses, and more.

Agile scaling businesses focus on scalable alternatives that minimise costs, such as;

• Infrastructure optimisation - standardised, low-effort, and automated processes for invoicing, delivery, customer enquiries, and follow-up
• Outsourced options for financial management, HR, Marketing, etc, to cut salary bills
• Strategic expansion – acquiring competitors to cost-effectively accelerate scale-up, and managing resulting changes to business model, assets, and domestic/overseas legal status
• Business coaching, business mentoring, and business plans, to ensure your business has the right roadmaps and people in place to meet scale-up challenges

Scaling up is about creating a business that can easily and cost-effectively grow, now and in the future.

Getting resource allocation right

Scaling up involves optimising resources to achieve maximum growth.

Therefore, the selection and utilisation of resources play a crucial role.

Maintaining a balance by limiting headcount growth and emphasising process efficiency is pivotal but it is essential to invest in individuals with the right expertise and experience for each role and to consistently support your business's visibility in the market.

Key steps to consider:

• Identify where investments in your business will deliver the greatest growth versus cost – recruitment, training, outsourcing, infrastructure improvements, etc.
• Align investment to stated objectives and outcomes in the business plan
• Understand the market and your competitors, to ensure appropriate resources are invested in addressing the greatest threats
• Develop, validate, and fund a sales and marketing plan to build on and increase scale-up momentum

Making resources work harder for the growth of the business is what scaling up is all about – Businesses need to make challenging decisions on how investments can best align with this objective.

Financing change

Scaling up has the potential to bring significant positive changes to your business.

However, the question remains: where will the funding for these changes come from?

Upgrading infrastructure, systems, and technology incurs costs. Recruitment, training, marketing campaigns, and programs all come with their expenses.

While these investments are necessary for growth. It's crucial to identify sources of funding to support, such as:

• Equity, loans, and other funding, with specialist advice on how to pitch for venture capital (VC) funding
• Research and Development (R&D) funding, how much you’re eligible for, and how to claim it
• Grants (money you don’t have to pay back) – local and regional
• Improved cash flow management and forecasting, to offset debt increases and protect against the effects of a lack of inventory

Scaling up needs finance behind it – commit to obtaining and maximising it, as an integral part of your business plan.

Why is it not working?

Your business not achieving scale can be a highly frustrating issue, especially after investing time, effort, and money in pushing for growth, only to receive minimal returns.

Various factors could contribute to this setback – from uninformed decision-making and ineffective management to a fear of change.

What should your next steps be?

• Make better decisions, through market data, financial reporting, and analytics
• Manage more effectively, through clear and timely management information
• Supercharge scale-up through acquisition, expansion, and diversification
• Properly identify and measure issues, by setting and monitoring key performance indicators (KPIs)
• Create a clear path for change and growth by setting, and enforcing, performance benchmarks
• Take actions to immediately increase your profit

To make scale-up happen, you need to know where the blockers are, what their impact on growth is, and how removing them will deliver value.