Moving from start-up to scale-up can be demanding. James Codling, co-founder and managing director of financing platform VentureFounders, offers some tips to help scale-up your business and ease the growing pains
Every budding entrepreneur dreams of becoming the next Richard Branson or Mark Zuckerberg. The reality, however, is that it is very difficult to scale a business from seed stage to growth without putting in a lot of thought and effort, even if you have the best IP on the planet. Countless businesses fail, sadly, despite having the right team and product, because they don’t have the resources – and significant financial backing – in place to scale. If you have the vision and drive to take your business to the next level, the following tips could help you achieve your company’s full potential…
1. Plan to scale from the beginning
It sounds simple enough, but you’d be amazed at how many businesses with great promise don’t look beyond the first five years of growth. Without basing your business objectives around one day dominating your market, you’ll struggle to amend your company’s culture and processes to accommodate a scaling plan further down the line. Aim high and consider the bigger picture five, 10 and 15 years down the line as you look to grow.
2. Hire staff who share your goals
You can’t scale on your own and you’ll need a supportive team behind you to drive the business through what is a stressful time. Hire experts and make sure you get their buy-in to join you on your journey. As you scale, it is impossible to know the minutiae of everything happening in your business. Having a trusted team with shared vision and values will free you to focus on business development, while they deliver the results needed for growth.
3. Have the right infrastructure in place
Anything you invest in should be scalable, from IT and staff through to production tools and new customer acquisition techniques. Money is always tight when starting and scaling your business. But investing in something that will grow with your business, rather than being a barrier to growing at the speed you need, will be much more cost effective in the long run.
4. Use your network
‘It’s not what you know, it’s who you know’ is a classic business phrase. While I’m no fan of blaggers and believe you do need to know your business, a strong network of contacts will help you go far. Network from day one – you’ll be surprised how many people are drawn to a good business and entrepreneur and will want to help you succeed.
5. Create an attractive proposal for investors
The capital needed to scale is significantly greater than it is to start a business. Expanding at a healthy rate will require further rounds of growth capital and the audience you pitch to for growth capital can be very different to the one that provided you with seed funding. Understand what drives growth investors to ensure they are engaged with your company and invest in the follow-on rounds required to grow a business. This isn’t easy to get right, so do your research and speak to an expert if unsure.
6. Learn from your mistakes
All business owners encounter unforeseen hurdles. Like a teenager transitioning from child to adult, you’ll need to test the water to try to navigate a new phase in your business’s life – sometimes it will pay off greatly, sometimes it won’t. Accepting you won’t always get it spot-on first time and keeping a positive attitude will help you overcome and learn from business mistakes so you don’t repeat them.
Who James Codling
Current role Co-founder and managing director of financing platform VentureFounders, launched in 2014 with the vision of giving ordinary investors access to early-stage opportunities previously out of their reach. The platform allows investors to co-invest in exciting British scale-ups alongside institutional and angel investors.
Earlier career Codling has 15 years’ private equity experience, having held investment roles at JP Morgan and Montagu Private Equity. At Montagu, he held directorships in a number of its portfolio companies.
James Codling is a member of IoD 99, the UK’s fastest growing network for young founders/entrepreneurs wanting to expand their start up. Find out more about IoD 99