For any entrepreneur, the excitement of getting a start-up off the ground is up there with buying a house or becoming a parent, and that’s only the start. You’ve then got the task of getting others just as excited about your product or service to ensure that your company grows into a successful business. That was certainly the case for me in 2009 when we were trying to get Xero off the ground.
When scaling up, a common mistake that entrepreneurs often make is to strive forward at such a rapid pace, that they often fail to put the right foundations in place. Here’s my advice to help you realise your ambitions:
Show me the money
It’s certainly true that it’s easier to set up a business on a shoestring budget compared with a couple of decades ago. And it’s still the case that the more capital you can get your hands on, the faster you can grow. This could turn out to be a key competitive differentiator in a new market.
Not all banks are willing to give loans to start-ups, viewing them as high risk. There are alternative lending platforms such as iwoca, a firm that lends to small businesses and offers fast and flexible credit facilities.
It’s also worth checking to see if you are eligible for the government-backed Start Up Loan programme, which allows a business to borrow between £500 and £25,000 with a fixed interest rate of 6% per annum.
Another route could be through a venture capitalist firm, an angel investor or a crowdfunding platform. Competition is fierce, but with the right business plan and approach, you’ll be in with a shot. Identify the firms that have specialities in your field, and study their client base closely. Learn from past success and pull together a pitch detailing your upward trajectory.
Get a good accountant
As well as helping you build a solid financial plan, a good accountant can also steer you to other places that could support. For example, the government’s commitment to offer small businesses tax breaks could be hugely advantageous. This could be through the Research & Development tax credits, Enhanced Capital Allowance, or the Enterprise Investment Scheme. There are quite a few different options, so this is where advice from an accountant can be really useful. The investment will be well worth it in the long term when you’re reaping the benefits of tax breaks.
How do you stand out?
Before you expand, take a step back and ask yourself:
- What makes my business different?
- How can I showcase my unique selling point?
- What are my competitors currently not doing?
- What do I want the consumer to feel when they think of my company?
Once you can confidently answer these questions, it’s time to create your own brand story and establish your route to market. By building a strong brand vision with your own tone of voice, you’ll be taken seriously by consumers. This is just as important as developing what it is you want to sell.
Stay ahead with the latest technology
Today, technology is at the core of business output, whether it’s the use of social media tools, digital infrastructures or cloud technology. The majority (94%) of businesses using cloud-based technologies benefit from it, so consider moving your business onto the cloud if you haven’t already. You’ll then be able to react quicker when scaling up.
You can use cloud accounting software like Xero to automatically chase payments, provide financial analysis, generate POs/invoicing and more. Artificial intelligence also has a crucial role to play in saving you time and money through automation. These technologies take the burden of administrative tasks away. As you grow, this can give you the headspace to focus on how you scale.
Your first hires are really important
At Xero, when recruiting our first few people, I assessed candidates on three main attributes: attitude, skills and knowledge. You might be surprised by how often I hired someone for their attitude over candidates who were much more qualified. It’s much easier to teach an employee a new skill than an attitudinal shift. When bringing on board your early hires, it’s their drive, ambition and energy that will add true value to your business’s first couple of years. This is particularly true when you need them to be incredibly flexible and accommodating in those first few rollercoaster months. And working for a start-up isn’t for everyone.
Look beyond a CV, take the candidate out of their comfort zone and try to imagine whether they’d be the right fit. You want employees to share your vision and this will pay dividends.
Have your finger on the pulse
When moving forward at pace, it can be difficult to stop and take stock of how you want your business to evolve. Ambitious start-ups are at a huge advantage as they can quickly respond to the latest societal trends that impact customer habits. Keep yourself informed with what your customers are saying, what’s in the news and what other businesses are doing, and you’ll be able to make the most of this flexibility.
By Gary Turner, managing director and co-founder at Xero UK