..should you stay or should you grow....?
Some business owners will have the intention to grow straight from the off whilst others will make the decision once the business has reached its capacity as a "company of one." Others will always stay as a "one person band." There is no right answer as to whether your business should stay as it is, or whether you should expand. If you aren't sure, read Paul Jarvis Book "Company of One" to help with the decision making, or particularly, if you feel like you should scale, but don't necessarily have the appetite but are feeling that it is the right thing to do, this book will help.
Get yourself ready
You should have a good idea of how business growth might impact you. For example, your role may change significantly. Instead of being customer facing and doing the work, you may find yourself with a more managerial role, perhaps ensuring quality or simply directing people to do what and when. You may also only fin yourself customer facing when securing new work, or when dealing with customer complaints. Consider how you feel about this change and how this will impact your job satisfaction. Often, risk increases as businesses grow and you should consider how well equipped you are to manage these increased risks, how you may manage stress and how this may impact other areas of life. Are you prepared to spend more time on your business or do you think that growth will make life easier. Either could be the case. Just make sure that you have given both prospects adequate consideration.
Plan your finance strategy
A growth plan requires careful financial planning. Availability of cash can make or break your plan to scale and so forecasting and budgeting are essential. You should build in some fat for sales being slower than expected, or costs being greater, although good quality research can minimise the risk of this happening. Consider which source of finance suits your growth best. See my blog on how to finance your business at different stages in its life cycle
With additional costs and management tiers in your business, you may need to revisit your pricing or ability to increase the volume of output. Similarly, a larger business may mean that you can achieve economies of scale. This is where you are able to reduce costs by operating at a larger scale. It's worth considering how each of your costs will respond to a larger business. Insurance may increase, while costs per unit might decrease.
If you use software like xero, add on forecasting software like syft analytics makes scenario building easy and you can see what results may be achieved from operating on a larger scale. Be warned - don't always expect that more sales means more profit. As we say, "Sales are vanity, profit is sanity" so aim for increased profits, not increased sales.
Secure the systems
Your business needs to be able to operate without you at the centre of every action and every decision. This is why systems and procedures are essential and there are determined in a way that assures that your business delivers its service or product at the standard that you require and in the way that you want it done. Software and other technology can help to automate tasks that don't require human input or connect people as needed. These may require finance to invest in, or can be paid for in bite size subscriptions or arrangements.
Target the market
To grow your business, you'll need to grow your sales. Understand what sales growth looks like in your business. It isn't always simply "more of the same customers". Growth in sales can mean higher prices, changing customer base or adding additional revenue streams, such as a new product or service to your existing offering, so have a clear understanding of what an increase in sales means to you. Once you know what this means, you'll need a marketing and communications strategy to make the idea a reality.
Find people to join you on the bus
The fact is, when your business grows, you probably aren't going to be able to do every aspect of your business yourself. The truth of this fact is that for many of these roles, there are other people out there who can do those roles better than you... and you need to find them. Once you've got your finances planned, you'll have an idea of who you can afford and when you can afford them. Sometimes these people might be employed, other times you might subcontract or outsource the service you need. There is no right answer per se, but HMRC do have some guidelines that you have to adhere to in the decision of when someone is employed and when someone works for you on a self employed basis. You can find more about this here
Don't forget to factor in costs such as employers national insurance and pension contributions. Employees will also have holiday so won't be available to you all year round. What will you do when they are off? And bear in mind that hourly costs of subcontractors are usually higher than employees but don't come with the additional costs previously mentioned.
If you're intrigued by the idea of scaling your business, speak to your advisor or book a power hour. It could be the most lucrative conversation you ever have!