Businesses often start successfully by launching a new product or service and establishing routes to market, but then fail to achieve their potential and see growth and profits plateau. Scaling a business drives up value, attracts investment and builds resilience, but it requires a combination of factors to do it successfully. Many of the most successful businesses share common traits.
Once again BDO is proud to be ranked the top advisor to scale-ups in the UK by the ScaleUp Institute* and to be a lead sponsor of ScaleUp Britain supporting scaling businesses to drive growth. Drawing on our extensive experience of helping business owners and founders up and down the country across all industry sectors, we've created our top ten tips to help you scale-up your business effectively.
1. Develop a clear vision and strategy
Recognising there is a difference between a strategy for the business, and not just the product, and a vision will help break through growth barriers. A clear vision and well thought out strategy provides direction and purpose. It helps align the team and stakeholders towards common goals and focuses decision-making. Many start-ups obsess about their initial idea or offering but then fail to seize growth opportunities and are over-exposed to one market. It is important to remember that investors focus on businesses, not just products. Designing a business able to scale will be more attractive to investors and enable diversification into new markets, building resilience in an ever-changing world.
2. Build leadership capacity
Effective leadership is crucial for scaling up your business. Leaders should possess the ability to inspire and motivate teams, make strategic decisions, manage resources efficiently and adapt to changing market conditions. No one person can do that in a complex business. Research by the ScaleUp Institute reveals that 8 out of 10 scale-ups consider it vital to upskill their top teams and 50% are seeking finance mentors and peer networks. As the business evolves, it will need to move from being founder-led to having a more diverse management team, ensuring new skills are brought in. Advisory boards may also help bring in wider experience to inform the board as they look to scale-up and transition.
3. Use data insights to inform decision making
AAll too often business owners fail to check facts and data regarding business performance and challenges. Understanding what is profitable, what customers value, external market trends, performance, efficiency, return on investment and other similar areas is sadly too often ignored and replaced by instincts or gut-feel which can be flawed. Developing a clear understanding of business drivers and capturing relevant data will ensure the right decisions are made at the right time.
BDO’s Business Lens Diagnostic tool has been utilised to assist 200+ organisations identify their blind spots and identify hidden opportunities, with the aim of realising the potential of their business and maximising growth. Gain a fresh perspective on how your business is operating and where you should focus efforts and resources to achieve the biggest impact
4. Access growth capital and finance
Adequate funding is crucial for scaling up your operation, allowing you to invest in infrastructure, expand marketing efforts, hire talented employees, and pursue new opportunities. When securing funding through private equity, venture capital or other sources to fuel growth, it is important to identify clearly how the funding will achieve that growth. Developing dynamic forecasts and identifying the real business drivers and steps will allow actions to be monitored and spend to be allocated correctly. A well-designed forecast will use these drivers to enable "what-if" analysis to understand headroom and sensitivity, and ensure adequate funding is obtained.
5. Take your business overseas
International expansion is a significant factor for success; and the ScaleUp Institutes work evidences exporting as a key predictor of scale-up potential. However, it is also the biggest challenge for scale-ups with 64% of CEOs calling for more help to access markets. Global growth can feel daunting, but it is a well-trod path and there are plenty of others who have gone before. Key considerations are, as always, to ensure you plan properly and allocate the right resources. Issues to consider include market position, method of distribution, supply chain, financing, pricing, brand proposition, legal and taxation, and local presence. BDO operates in 164 countries globally and is well placed to support your growth ambitions.
6. Attract and retain the best talent
Building a talented and dedicated team is one of the foremost challenges highlighted by scale-up CEOs. Recruit individuals who possess the required skills and expertise, and who share the vision and values of the company. Don’t presume the original team will be the same people who will take your business to the next phase and address barriers head on. At the same time, losing skilled staff can cost your business much more than the cost of recruiting new staff - it will also lead to lost knowledge and relationships. Future proof your business by hiring people with resilience and flexibility to develop your business as it grows, and by putting in place a coherent people plan.
7. Put your customers first
Prioritise customer satisfaction and continuously improve customer experience. Listen to customer feedback, address their needs, and adapt products or services accordingly. Loyal customers can become brand advocates and help drive growth through referrals. Most business will lead on at least one of these key factors: relationship, expertise/IP or value. Key to this is really understanding your value proposition and customers - what it is they truly value in you? Be obsessive about meeting customers’ needs.
8. Streamline your operations and processes
Agility is key in an ever-more challenging world and so streamlining internal operations, removing waste (or inefficiency) and refining processes to improve productivity can give your business a competitive advantage. Implement scalable systems, automate repetitive tasks, and leverage technology to optimise resource allocation, inventory management, and customer service. Also be prepared to refocus business resources where they will achieve the most impact – the business will need to adapt and change as it scales-up.
9. Embrace strategic partnerships
As the business evolves, not everything has to be done by the finite resources in the team. Identifying strategic partners who are equally ambitious for your growth is important. An agile business may find it quicker to partner with established players to avoid investing scarce resource and effort, and de-risk non-core activities. Strategic partners can also provide opportunities for growth, access to resources, and shared expertise. At BDO we pride ourselves on being focused on helping growing businesses to scale and work alongside other organisations in the ecosystem as a lead partner of the Scale Up Institute.
10. Keep adapting
Too often business owners and founders become internally facing focused on what they are doing and how they are performing. This strategy risks letting the competition steal your market, or missing customer needs as they change and can lead to businesses plateauing or declining. Finding the right advisors is fundamental. It’s vital to choose someone you can have a honest conversation with, who can help you make difficult decisions. The board should allocate adequate time for horizon scanning and monitoring threats and opportunities. Your competition will adapt and change, so must you. Stay ahead by continuously evolving and improving your operations and products or services. Be brave, think big, be ambitious!
Scaling-up a business is a complex process, which requires deeper resource, wider skills and alternative viewpoints as the business evolves. It also requires a willingness to look back and learn lessons quickly ("fast fail"). Regularly assessing and adjusting strategies based on market feedback and emerging trends will ensure agility, adaptability and sustainable growth. At BDO our Business Lens diagnostic tool can assess how your business is performing and areas you need to focus on to achieve your goals. It’s free of charge and you can access it here.
