Starting a new business is exciting. There’s a buzz around the office and everyone is working to drive the company forward.
Startups are often a hive of new ideas and awash with creativity. But this doesn’t always last forever. As businesses grow, their owners sometimes lose sight of their original goals. So that’s why there are some important things to think about as you scale up.
Things like cash flow, how to find the right team members, and understanding your targets in the first place are integral to your success as the company develops. That’s why in this article I’m going to discuss the four questions you need to ask yourself as your business grows.
Where will you get funding?
This is one of the questions that keeps many entrepreneurs up at night. Growth can’t happen without the capital to fund it. Even growing businesses that sell products like gangbusters struggle with cash flow. Don’t worry, however, because there are plenty of options.
The obvious solutions are things like personal financing and loans. Crowdfunding has also become increasingly popular over the last few years. You even could raise capital by finding an angel investor who is willing to give you investment in exchange for equity in your business. Many will also understand your situation and be able to provide invaluable advice on growth. Angel investor Tom Chapman grew his company Matches fashion from one store in Wimbledon to one of the largest luxury e-commerce businesses, making sales in 170 countries.
WhatsApp’s Jan Koum is another example, who started with nothing but built the app into a tech powerhouse, before selling the company to Facebook for $19 billion in 2014. Investors understand how to make a business grow, because they have been in your situation. The difference is that they can provide you with the means to make it happen.
What is your business plan?
There have been plenty of people over the last few years who claim that you don’t need a business plan to grow. However, the successful businesses that started without plans are the exception, not the rule. Sir Richard Branson, founder of Virgin, recommends you look to the future from the start. He says, “Setting some milestones for you and your team to work towards will keep you motivated and driven”.
If you don’t have any idea what you are working for, then it’s likely you will get side-tracked. A plan ensures that you can synergise every aspect of your business. Your marketing, sales, research and business development all need to be branches that stem from the same tree. Continuity across every aspect of your company will mean that all employees will be sure of what they are doing, and you never have to ask, “what next?”.
Do you have the right team?
You can’t do everything yourself. As much as you might want to, there comes a time (and it’s usually pretty early) where you must delegate the work to others. So, unless you have the right team behind you, your business can only go so far.
Be wise about the people you hire and promote. When looking for a new employee, think about your candidates as if you were trying to find your own replacement. Only then can you be confident that you can delegate important tasks to them.
The right attitude trickles down from the top. It may be easier to pass on your knowledge when your company is small, but less so as it grows. Teach your employees well and they will teach those under them the same way. Just as with your business plan, this makes all aspects of your business work hand-in-hand.
What problems will you face?
Don’t get too caught up in the positives. A big part of growing your business is understanding calculated risk. At any moment, some aspect of your business could fail. But if you take the proper steps, as mentioned previously, the chances of that happening are reduced.
For instance, a competitor could come along who has a product that is more fit for purpose, making yours obsolete. Similarly, they could be much cheaper, which would squeeze your profit margins (or even eliminate them completely). New legislation could come in to play, meaning it is much more expensive to operate in your industry and you have to find completely new ways of doing things.
Another thing to consider is the possibility of your business growing too quickly. This could lead to issues with scaling your customer service, which may be too small to handle the increase in demand. It can also lead to you losing track of finances, or rushing to hire new employees who turn out to be wrong for the role.
These questions provide a useful framework for you to ask as your business grows. But don’t just ask yourself once. Keep evaluating. Even the world’s largest companies are constantly considering where they can improve. If they didn’t, they wouldn’t have got where they are in the first place. Always consider what’s next for your business and plan accordingly.