For ambitious entrepreneurs, scaling up is often the ultimate dream but it is important to set realistic goals and get your timing right, says Michael Farrell.
Expanding your business is not without risk so you should always make sure that your plans have a sound financial footing and are supported by an appropriate operational infrastructure. While every business is different, here are 15 questions to consider:
1. Why are you scaling up and how big are you thinking? You need to be confident that you have identified the right opportunity and have the right resources, infrastructure, skills and team in place to achieve your vision.
2. Are you ready to scale? You will need to be sure that your operational infrastructure can continue to cope as you expand. Effective scaling up should increase your revenue without increasing your production costs.
3. Have you implemented a sound financial framework? Running out of cash is a common causes of business failure. Keep tight control of your cashflow, avoid overtrading and ensure you do not run out of working capital.
4. Have you a well thought out plan for growth? Discuss your plan with your professional advisors. An objective view will help you capture weaknesses.
5. Do you have sufficient funding? When applying for grants or loans, you will need to have a robust business plan and strong financial management in place to give your lenders confidence.
6. Will you need to find investors? Again, your business plan and sound financial framework is important when seeking venture capital.
7. Do you have the right team in place? People will be key to achieving your ambition. A good HR framework will help you build and retain your team. As well putting good policies in place, invest in training, mentoring and think about career progression opportunities for your employees.
8. Are you making the most of technology? Properly implemented systems can save you time and money.
9. Have you considered outsourcing non-core functions? Outsourcing areas such as payroll or HR not only frees your team to concentrate on revenue-generating activities but also gives you access to broader expertise than you may have in-house.
10. Are you leveraging all relevant data? Today’s realtime accounting systems can give you 24/7 access to up to date information on how your business is performing. Make sure that your finance team and/or professional advisors are leveraging this data to give you practical, relevant insights and support good decision-making.
11. Are your existing customers ambassadors for your business? If not, could this be because you are over-promising and under-delivering? If you have experienced an increase in complaints, this could be a sign that you are scaling up too quickly Listen to customer feedback and address any issues you identify.
12. Does your business plan involve moving into export markets? Check whether your professional advisors are members of an international network that can open relevant support and opportunities.
13. Have you thought about how you can stay fit as you scale up? Some entrepreneurial businesses lose agility when they grow.
14. Can your business can function without you? If not, this is a challenge that will need to be addressed before you try to scale.
15. Are you leveraging your network? Good relationships with customers, lenders, suppliers, professional advisors, recruitment partners and other relevant parties will support your scale-up potential.
Beyond ambition, there can be many signs that your business is ready to scale up — perhaps you’re getting more leads than you can cope with or your brand reputation is growing outside your traditional markets. If you are willing to take the next step and have the right foundation in place, you will optimise your chances of success. However, if you are not ready to take the next step, there may be other options to consider, including whether the time has come to sell the business. In business, as in life, there are always options once you think ahead and take good advice. Our team are here to help if you need us.