Dafydd Llewellyn, MD of SMB UK and France, SAP Concur, shares his advice for scaling your startup, from careful finance planning to researching potential markets properly
Let’s be honest, running a business is hard work. As a business owner, you have to wear all sorts of different hats, from the salesperson, the visionary, the cheerleader, the manager to the ‘doer’. On top of that, you’re also tasked with growing the business. This is arguably one of the most important jobs of all, as without growth you won’t be able to afford that new office, give out bonuses and promotions or break into new markets.
Scaling-up is considered the most important piece to get right. Go too slow and you’re in danger of stagnating; too fast and you might go bust. So, where do entrepreneurs start?
Of course, there’s no ‘one size fits all’ approach. Each business has its own specific requirements. But there are some fundamental points worth considering when planning your growth.
Build a solid plan
After speaking to many small business owners day in and day out, the first step is mapping out what you want to achieve and the money needed to do so. Not forgetting a contingency plan for any turbulent times, such as unexpected competitor activity or an economic downturn.
Create a timeline
Then, turn your plan into a working budget with a clear timeline. Be ruthless when deciding on what is essential and what is a ‘nice to have’. For example, do you really need a marketing team of eight people? For a growing business, that money may well be better spent on product development or technology that keeps operational costs down and gives your staff back the most precious thing of all: time.
Use the right tools
To allow for this growth, the solutions you choose need to be flexible and able to remove bottlenecks across operations – and they also need to deliver the right insights. For many, the right time to invest in these tools is after funding is received. As your company expands, your technology needs to provide visibility across the entire organisation, allowing for greater oversight to improve efficiencies.
Luckily, there’s a plethora of affordable and easy to use tools that can take the heavy lifting out of your hands. For example, managing holidays, entering data, chasing invoices, remedying incorrect expenses and tracking down missing paperwork. This leaves you and your finance director to focus on the strategic thinking.
Do your research
This is especially important when expanding into new markets. Setting up an office in Berlin may seem like a great idea – especially given its reputation as a startup hub. But don’t base this on hearsay or a hunch; Google Trends is a great reference point to research which regions your product or service has the greatest appetite in. However, back this up with additional research into the regulations you’d need to comply with to ensure its worth the investment. And finally, check to see if any existing customers have any offices based there – an upsell is easier than a completely new business.
It would seem logical to say that once you have your plan, stick to it. But don’t. This should be a working document where spend can be swapped in and out as necessary. With this in mind it is vital to ensure that you have complete clarity and visibility of the business spend as it happens. Keeping tabs on how you are using any funding you may have received, but also managing the other cash flows coming in and out of the business, is crucial. It seems like a simple and obvious statement to make, but this can become increasingly difficult when you are spending vital time and resources running and growing the business.
Scaling up to the next stage of growth can be daunting. But if there’s anyone who can do this, it’s small businesses. They are branded as the ‘backbone of the UK economy’ for good reason, due to their resilience and ability to be much nimbler than bigger businesses. If something isn’t working or one part of the business is more successful than the other they’re able to quickly change direction – and grow that way instead.