The UK's been making a concentrated push towards promoting small business, especially since the Business is GREAT campaign launched in 2013. Almost 500,000 new business were created last year, and many of those new businesses are determined to expand. Of course, scaling up your business isn't as simple as flipping a light switch - especially if you need to hire and train new staff, find a new office space, or purchase new equipment.
The following sections explain four key considerations and challenges that businesses face when scaling up.
Sometimes growth occurs because you discover your calling. Maybe you narrow your services or maybe you shift markets entirely. This is anything but negative! However, you do run the risk of alienating your current client base and possibly losing some customers. It's even possible that you've outgrown some of your customers and have a better idea of who your target audience is. Be certain that you're ready to commit to a new system, and that you have a business plan at hand for the direction you plan to grow in.
Often, scaling-up means hiring more staff. This sort of expansion is exciting, but it's important that you understand what changes when you shift from being a sole trader to an employer. Namely:
The biggest risk in hiring new staff comes from possibly losing your personal touch or experiencing a drop in quality as someone new takes over. On the other hand, you might hire someone with a skill set that covers your weaknesses, allowing you to reach more customers and offer new services.
Spending more money to secure potential growth is always a risk, but there are many options available to you beyond taking out a bank loan. You can apply for a number of grants and finance options from the government or you can look to a mentoring organisation.
We're also on hand to offer you advice and walk you through financial plans that will help your small business grow. You can contact us here.
As with any business venture, there's always the risk that things don't go to plan - and some of these risks are largely out of your own hands. Perhaps you've adopted a new direction and you lose your customer base; bad timing could coincide with an economic downturn; or maybe it's nothing dire, but simply aren't enjoying your business since expanding. Whatever happens, stay adaptable.
There will come times when you need to rethink your business plan, take your company in a new direction, or hire people that have the qualities you lack. All of these changes can be very positive and spur even more growth, in a new direction.
Whether you’re a large business, SME or sole trader, work from home or have a property empire - Towergate have got an insurance policy for you. For more information, visit our dedicated business insurance page.
Alison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.
Date: March 21, 2016