A scaleup is a business growing consistently at 20 per cent each year. This rapid expansion presents unique set of challenges to the owners and managers of scaleups.
The Scaleup Mindset is a new series of tips and advice articles from Two Zero. We’ll partner with Lancashire and UK experts to understand the mindset of a scaleup leader and prepare owners and managers for rapid business growth.
Building your own business from the ground up means that you have invested a lot of hard work and money. Nisha Sharma, mergers and acquisitions director at KPMG, outlines five golden rules you need to be aware of for pivoting your business to enable it to scale through innovation or by entering a new market.
1. Know your limitations
When your business is young and small you will have taken on most of the workload, but as your business grows it is important that you don’t continue to try and wear all the hats such as being the CEO, CFO and CTO.
While this may have made sense at the start, as you scale it is important to have the right infrastructure in place and people focussing on different aspects of your business. This shift in mindset, from being the central point of contact for everything, means you can delegate and focus on driving the strategy that is going to grow your business.
You could also look to bring in strategic partners who can help expedite growth by utilising their expertise. By exploring the market and bringing in a strategic partner, you could reduce the time to market for new products and services, allowing more time to focus on what you do best.
We understand that it is not easy to let go of the reins and may seem daunting at first. It may even require a leap of faith, but ultimately your senior management team will be there to support your growth and shoulder some of the more onerous tasks.
2. Establish a good sounding board
You will also need to establish a good sounding board, people you can call on to advise you through any difficult situations and obstacles. This could be in the form of a non-executive director or a chair, the title doesn’t matter, their experience does. Someone who is independent of your business can also provide challenge which is healthy for a scaling business. Maybe someone who has been there before. They don’t have to be like you or your best friend. You are unlikely to get everything right, so it is good to have someone looking over your shoulder and checking in.
3. Look three years ahead
Look to the future and ask yourself, where do I see my business in three years’ time? Then think about what the building blocks are to get there. It sounds simple, but many entrepreneurs can get bogged down in the day to day and forget to put in place plans to grow. If you know where you want to be, you will be able to build the team around those goals, implement the appropriate financing structure, think about the sustainability of your client base and monitor progress as you go along.
It is great to be ambitious and shoot for the stars, but you must learn to walk before you run. Be the best at what you do and build a reputation for that. You shouldn’t try to take on too much too soon, instead seek to dominate your chosen market without spreading yourself too thin. Being a jack of all trades could limit your future valuation prospects as investors and buyers want to clearly understand what you do and what differentiates you from your competitors.
5. Understand your market and customers
Over recent years we have seen increased regulations and social responsibility drive change, for good or for bad, therefore customer sentiment is crucial to understanding whether what you’re doing is right. You need to keep your eyes and ears open, this can be through social media listening tools or focus groups.
Implement a social media strategy to engage with your customers and understand what they value and what they don’t, this will be an important part of your growth strategy. You will struggle to grow without customers who value your product or service, but with an engaged and loyal customer base, you will be in a strong position to scale up.
If you follow these five golden rules, you will put your business in the best position for not only growth, but also resilience.
Nisha Sharma, Mergers and Acquisitions Director in the North West at KPMG UK.