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As an SME business coach and growth expert, it's a question that comes up a lot. In far-distance days working in Investment Banking, I grew a business from £500m of turnover to just over £2bn before it was sold. Those numbers seem implausible now, and the businesses I help are thankfully smaller and less complex, but actually, the core principles remain the same.
Scaling a business is hard, but there are some key steps that are always essential to succeed, and the skills that lead you to have a great business in the first place are not always the ones that then help you grow it effectively.
"I understand all the technical aspects of my business and have managed to grow BGR Group companies to a turnover of £3m a year, however it was only when I started working with James at The Alternative Board that he helped me understand how I should have done it, and the steps I need to take to keep growing in scalable way from here"- Richard Burns, Founder BGR Group and TAB North Chilterns member
Scaling a Small and Medium-sized Enterprise (SME) requires a strategic and well-thought-out approach. Here are some tips to help you effectively scale your SME business:
Have a Clear Business Plan
Develop a clearly articulated business plan that outlines your critical success factors, goals and strategies to achieve the goals. It does not need to be a lengthy, wordy document but sharp and concise. This plan will serve as a roadmap for your expansion.
Build a Strong Core Team
Getting the right key people around you from the start is essential. Focus on hiring experienced people at the start who can give you momentum, and then, as the business grows, you can backfill with more junior resources to leverage them. Ensure that your employees share your vision and are equipped to handle increased responsibilities; it is also a great retention strategy.
Strong Financial Management
It's really important to understand the key figures in the P&L and Balance Sheet and what is driving them. Often, when you are scaling a business, turnover may be growing, but P&L may be flat in the short term as you are investing in the business. Understanding cash flow is vital as, more than anything else, this can kill a growing company.
Invest in Technology
Embrace technology to streamline operations, improve efficiency, and enhance customer experience. Implementing tools such as CRM systems, marketing systems, and automation can help your business scale more smoothly.
Diversify Revenue Streams
Look to create diverse revenue streams for the business and explore new markets, products, or services. This can help mitigate risks, provide alternative sources of income during the growth phase, and give you more significant opportunities further down the line.
Effective Marketing and Branding
Invest in a well-defined marketing strategy to increase brand awareness and attract new customers. You can use digital marketing, social media, and traditional channels to reach your target audience.
Establish Strong Partnerships
Monitor Key Performance Indicators (KPIs)
Identify and track easy-to-produce but relevant KPIs that align with your business goals. Regularly analyse these metrics to assess performance and make data-driven decisions not based on sentiment.
Financial Investment
Consider seeking external fixed-rate funding to fuel your expansion. I advise trying to avoid giving away equity as the price can be high at an early stage, and you also lose independence. Fixed-rate investment can be a great way to give you liquidity to grow. There are also government-backed schemes for SMEs to help as well.
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My final piece of advice is to consider whether a business coach and peer board can help you on your journey. If I want to improve my tennis, I hire a coach to help me improve. Running an SME is much the same...it can be a lonely place, and getting some help can be a massive accelerator to achieving your goals.
" After COVID, my major source of revenue for my business completely ended overnight. I was a bit sceptical about how a business coach could help but I met James and decided to give it a go. WOW, I was so wrong......working with James was the best decision I ever made. Over 18 months, we have rebuilt the business, from a point where my spirits were so low I was thinking of selling it to now where it is flourishing again. My whole view on how to run an SME has changed.- Barry Salmon, Owner Fulfilment Matters.
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