Around half of start-ups fail within the first four years of being in business. And even those that succeed will have to work hard to achieve the annual growth in employees or turnover required to be called a ‘scale-up’.
While there is no fail-safe formula for securing 20% growth per year, following these 6 steps will help you to put your best foot forward and ensure you’re well positioned for growth.
- Consider your funding options
During this period of doubt, growing businesses may find it more difficult to access traditional funding. But this doesn’t necessarily need to be a bad thing. They should take the opportunity to explore new avenues, such as alternative finance, that may actually provide a better fit for their business. For example we are able to provide between £500,000 and £4m business funding by matching SMEs with sophisticated investors.
In addition, it’s best to consider what form of investment suits your business. If your business is high-growth, do you really want to give away a stake in it? Carefully consider whether debt or equity funding would be most suitable and do some research into the propositions of a number of different providers.
- Learn from your mistakes and adapt to change
When approaching investors, be transparent. Acknowledging errors made and learnings from these demonstrates maturity. Evidence your adaptability and trustworthiness by making clear the remedial actions that you have taken, and you will go some way towards turning a negative into a big positive.
Beyond this, be aware of the market and wider economy. Successful business plans take external factors into account and will adapt in response to these. Adopting a pragmatic approach early on will set you up to deal with turbulent market conditions in the future.
- Network, but for more than just business leads
However, there is more to achieve from networking than just building a customer base. Aim to meet seasoned entrepreneurs and business leaders who can mentor and offer advice. Investors look at the calibre of non-executive directors as an indication of the quality of guidance the business is receiving, so your mentors can go a long way to helping secure investment.
- Have the heart of a start-up, and the head of a seasoned multinational
Going forward, balance this element with carefully considered plans. As a start-up you have the benefit of agility, but the larger you grow, the further you have to fall from grace, so consider your development carefully.
- Hire the right people and let them flourish
When building a team, balance enthusiastic young talent with experienced heads and encourage discussion and innovation. Don’t be afraid to delegate responsibility, share in successes and reward valued input. Your business has its own unique set of short- and long-term goals, and achieving them will be heavily dependent on not just the skills at your disposal, but your ability to effectively manage the people with those skills.
- Allow for flexibility in the structure of your business
These factors need to be considered on more than just a financial level – think to the future and plan around your growth.
Many of these factors interlace in some way. What ties them all together is investment. Top talent will want to work for you if your business has investor backing, and you’ll have the flexibility to change locations and processes if you have the capital to do so.
Firm funding foundations will put you in a good position to build a strong, sustainable business; one that has the potential to scale-up.
By Ben Cohen, marketing manager at UK Bond Network