31st July 2019
If your business is starting to see success, you’re probably finding that the madness of your early-stage survival is subsiding and your ability to grow is a new type of challenge. The growing pains between a “startup” and “high-growth company” are a double-edged sword. On the one hand, you have a snow-balling customer base, brand recognition and team capability. On the other hand, processes and organisation structure are starting to increase in complexity and your old mantra of “let’s just get it done” will occasionally start to fail you. Things will be missed, opportunities lost, and time wasted.
If you look at the core of your business, there are five areas that you can probably expect to be particularly difficult.
Where previously processes seemed to be covered on an ad-hoc prioritisation basis, your internal operations are probably bursting at the seams in this phase of your business. You will need to find ways to streamline your internal processes like on-boarding employees, communicating as a team and keeping back-office tasks ticking along. These tasks can become overwhelming without a willingness to invest in the resources, people and technology that you need to streamline them.
Whether you do attraction photography like Event Photography Limited or cookery classes like Ashburton Cookery School, you’ll need to focus on your internal processes to ensure you can grow your company efficiently. In both of these cases, they were expanding their operations to multiple sites or shifting from one major customer to multiple. This type of expansion requires the establishment of consistent internal processes that allow the company to physically expand while remaining operationally sustainable.
Increasing the size of your team quickly, identifying the skills you need to acquire or outsource, scaling your culture and importantly, maintaining the overall quality of employees will be difficult. You have likely exhausted your direct network getting to this point and hiring the next round of employees requires persistence, planning and organisation to pull off efficiently.
Developing an engaging investment pitch that stands out from the crowd isn’t simple, even when you’re on the road to success. Take Tosh Ecoffee Cups, who used the fact that they had an engaging product to establish their investment not just as a request for capital, but an opportunity to establish ambassadors. They did this by offering their product to their investors as part of the package. Your company might not have the appeal of a coffee cup, but every opportunity has the potential to create a unique proposition to investors that will excite and engage them. Your initial investors were looking for a small seed of opportunity or perhaps they trusted you personally, finding new investors will take more polish and planning than before.
Your strategy to this point has probably been to do whatever was necessary to survive, except, now you’re gaining more clarity and market-fit. You will need to identify the balance between pursuing short-term growth, and furthering the vision you have created for your employees, customers and investors. This will include a collective vision within the company and ensuring you retain capacity outside of delivering to customers to continue furthering that vision.
Take for example, La Gelatiera, an artisan ice cream business, who had been achieving excellent growth by expanding to corporate catering opportunities. They still continued to pursue an additional store in order to expand their market beyond Central London, looking to achieve their vision of becoming an established chain. They did this by taking advantage of the seasonal market, allowing them to continue to grow their catering opportunities, and using the colder months to establish their new store.
Regardless of how much effort you put in to plan and organise your business in this growth period, you’re going to be fighting fires. Perhaps you’re a physical goods company like Ruroc and there’s an issue in your supply chain, do you invest in improving your tooling, or do you continue to operate with what you have? To continue to improve, you need to take the time to identify when those fires aren’t just a product of an immediate problem, but rather an ongoing issue that could be a bottleneck for your team. Creating accountability at this stage and empowering your employees to make necessary changes will help you retain the agility you need in order to continue succeeding.
Consider how your business is positioned to cope with these challenges, and whether you have the structures and processes in place to scale and adapt past them. In all likelihood, you don’t. Which is perfectly reasonable! Building a company to perfectly scale these things is expensive and frankly, isn’t necessary at its inception. Your team has been capable of picking up the slack and coping with the challenges as you’ve grown, but the next phase will require more intent. In this series of articles, we will be exploring each of these challenges and identifying how you can pre-empt and design around them.
Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.