Guide on How to Manage Business Growth
Your start-up has now established itself and the phone is ringing with potential new business. Revenue is increasing, profits are coming in and you’re making a name for yourself among your competitors. That initial worrying period when you were not even 100% sure that your start-up business was viable is over. But you may not be able to relax just yet. Growing your business can be every bit as much of a challenge as getting it off the ground in the first place. “The start-up stage was hard and meant plenty of headaches. But scaling comes with them too. They are different headaches certainly, but they are headaches all the same.” You know your business works but trying to make it do much more, and still only have the same amount of time to do it in, can be every bit as difficult as the first handshake and the first sale. Maintaining your high level of service and overall customer experience actually becomes harder to do as your company grows. You’ll work hard to get to scale, but then you will find that when the market changes, it’s now harder for you to shift with it. You’ll find that you have two or three times the workload as you put on more business, but the working day is no longer and that there are physical limits on what you and your team can do. Being inconsistent with your service-level agreements (SLAs) as your business develops can have detrimental long-term effects on its success. So now that you have mastered business set-up, how can you manage business growth? Watch the money Keeping your finances in check is vital at any stage of your business' development. It’s all too easy to get complacent when your profits are rising but you’ll put yourself at risk of mismanaging your finances. The faster a business grows, the more important it is to plan future financial decisions. Take time to look at your finances, and realise that the financial models that served you during your start-up phase need to be redrawn. With growth, revenue levels, cost and overall cash flow change dramatically. You may be making more sales and more money – but you will be spending much more too. You’ll run into many unforeseen costs, such as broken equipment, the need to hire new employees or an unanticipated opportunity that requires you to act, which of course means spending money, quickly. It’s easier to deal with business costs and limit the number of financial surprises if you plan. You need to set benchmarks, forecast your business’ upcoming finances, profits and sales, and stay organised. You may also need additional investment. A fast-growing business needs capital behind it. New stakeholders will be much more likely to invest in your company if you have strong cash flow credentials. Above all, keep a tight rein on your cash flow. Just because your business is bringing in cash does not mean it is profitable, and good supplier management and stock control are vital – you want to free up money for growth, not have it tied up in outstanding debts or existing stock. Weekly financial monitoring and forecasting soon becomes essential – keep a close eye on what is coming in and what is going out of your business. Funding your growth Business growth does not just happen - and although it should, in theory, be possible to fund growth organically from the profits you make, in practice, it very rarely is. So, for example, you might require a second production machine to help you deal with demand. You may not yet have paid off the first one and a new machine will mean a large investment before it is installed and starts paying for itself. If you wait until you can afford the machine you need from your profits, you waste time – and precious opportunities which may not come again. There is a similar story if you want to bring in another member of staff. The answer is, of course, to increase your borrowing and pay back the loan when your new machine or staff member is already working for you and helping you generate additional profit. As a business that now has a record of success, even though it may be a short one, this round of borrowing will be much easier, and probably cost much less than it did when you were a struggling start-up. It is simple to understand that as your business grows larger it will require a larger level of funding to keep up with new demands and run day-to-day operations. A Working Capital Finance loan can supply you with the supplementary funding needed to accommodate new orders, build inventory, update your production equipment, expand your office space and hire additional team members. There are many different loan options available, so it’s imperative that you get expert help to find the right type of loan for the and with terms and conditions that fit the needs of your business. Build the right team As your business expands, you will need to have the right people around you to support you. It is not just about plugging a skills gap or simply finding someone to do the job as fast as possible. It is about recruiting people who will fit into your company’s culture. Getting the right team is essential. The employees you hire make the difference between success and failure for your business. Regardless of the products or service features and benefits you want to offer, without the right team to provide them, your business will simply not thrive. Hiring employees that don’t fit in with your current or desired work culture will inevitably lead to poor performance and decreased levels of job satisfaction for all – and you will find yourself looking at the time and costs of recruitment all over again when you have to replace your unsuitable hires. Your team should reflect your vision of your company and represent the values, beliefs, behaviours and commitment that make up your business culture - which is precisely the thing that may set it apart from your competitors. To grow a business effectively, you must be able to trust the people around you. Growth can stagnate if, as a business owner or manager, you insist on overseeing every little detail. Allow yourself to step back from the day-to-day running and leave it to the people you have brought in. It gives you a chance to see the bigger picture to focus on business growth and development opportunities. Once you have a great team in place, work at retaining them, ensuring your employees feel valued and that their roles and responsibilities stay fresh and stimulating. Looking to make the most of your growth? Find appropriate and affordable finance tailored to your business' needs Know your market Have a strategy for growth Growth does not just happen and, if it does, it will not be sustained unless you have a strategy to drive and support that growth. Focus on your strengths. As your business grows, you need to leverage these strength. It’s essential to capitalise on factors that make you stand out from your competitors and identify and focus on your target audience and their needs. Engage and entice your target audience with benefit-oriented marketing content, special offers, informative events and services that highlight the strengths of your business and connect the customer to your brand. Above all have a strategy for your growth. A growing business needs to be supported by a robust business strategy. Without it, your growth could simply stop at any time and you will have very little chance to do anything about it. Spend time thinking about what makes your business tick and what you’re good at, and try to understand the key factors: Understand your growth: It is vital to understand what the factors are behind your growth. What has sets you apart from the competition? What’s your differentiator? Is it cost, quality, location or something else? Understand your potential: How much more can you grow? How much more do you want to grow? Do you want to run a very large business, or would it be unwieldy, and doomed if the market changed? Creating a mission statement can be useful, as it will nail down your objectives. Understand your limits: You need to be realistic about what you can achieve. If you don’t have the resources or support in place to take on a huge contract or big international order, then don’t take it on. It is better to be honest with a potential new client rather than accept the work and do a bad job on it. Understand your goals: Having clear goals will help you take your business forward. You cannot just say, “I need to increase sales and cut costs”. Be clear about how much you want to increase your sales by and the particular areas where you want to cut costs. You may need to set targets and make those goals measurable. Exactly how many sales do you want? When do you want them by? What level of revenue will you expect from them? You need to be clear in your objectives, and making them measurable will let you be clear if you have reached them or not. Set yourself a specific timeframe. Work these timings into your business plan and stick to them. Know your growth market The final part of any growth strategy is to understand your market. Do your research and get a picture of how your customers behave and what they want. Remember, business conditions change constantly. You will need to do this on an ongoing basis. It is useful to do a SWOT analysis, where you assess your own company’s Strengths and Weaknesses, and then identify Opportunities open to you and any threats you face in the market that you serve. This will help you to identify a niche in your market. Safeguard your intellectual property If you’ve worked hard to establish a brand or product, you can’t have a competitor swooping in and copying you. Take time to get to grips with your intellectual property rights and ensure you trademark your product name and logo, and patent any new inventions or products. If unsure, it’s worth speaking to a legal professional. Funding to scale your business Getting the right funding to keep up with your business’ development is critical. What might have been successful when your business was smaller might not be as effective now. The scale of investment in your business a year ago - when it could have been half the size - will be a drag on your growth rather than a support. For example, you may need to bring in new people, new machines and even new premises to keep up with the same high levels of service. It's crucial that you are aware of the new set of risks and opportunities presented to your company as well as your incoming and outgoing cash flow. Most importantly, put goals and deadlines in place to stay on track for further growth, including any necessary financing requirements. At Rangewell, we can work with you to help you access the funding you need as your business grows. We know all the lenders in the UK market and we can help you find those who are most appropriate for your needs - and help you with the application process. We can even help you determine what type of funding is most appropriate for your needs - and ensure that you approach the most competitive lenders to provide it. Plus, our services are free. To find out more, call us at Rangewell on 020 3637 4150 or email [email protected]
How to grow a nursery business
Nurseries provide an important first step in children’s development, providing a halfway house between home and primary school. They can also provide a profitable business if you have the patience and childcare skills required. There will always be a demand for places in a well-run nursery, but you will need to work hard to make real money. “I’d been running a nursery for two years and there was always a waiting list. I was not really bringing home enough - but I knew I couldn’t just put the fees up.” Check how much other nurseries in your area charge. Then work out how many children you will have in your care and how much they will be paying. All 3 and 4-year olds are eligible for up to 30 hours a week free childcare. You’ll get a payment from the government to cover this at a rate of just £4.30 - so you could expect a minimum of £129.00 per child. If your local area has families who pay much more for nursery places, you may be able to ask the same rates for yours - parents are rarely interested in simply finding the cheapest place, and will be happy to pay a reasonable rate for a place in a nursery where their children will be safe and happy. Aginst this, you will have costs to cover. The number of staff you need to employ will depend on the number of children you have in your care. The National Standards for Day Care and Childminding regulations (2003) demand: For children aged up to 2 years: 1 staff member for every three children Children aged 2-3 years: 1 staff member for every four children Children aged from 3-7 years: 1 staff member for every eight children The average salary for people working in a nursery is £19,000. Remember, you should then use the government's early years qualifications tool to check if someone’s qualifications allow them to work in an early years setting. The costs of staff, premises and equipment will all be high, and you may discover that you will need a surprisingly large nursery to break even, let alone make a profit. “The more children you are caring for, the more profits you will make - but remember you will need more helpers and more equipment - so the extra income is not all coming your way.” But if you have a calling to run a nursery, it could be the business for you. However, as a look at the figures will confirm, you must achieve a certain minimum number of children to cover the costs. There will be economies of scale, and the more places you have, the greater your profits can be. This means that to make the most of your nursery business, you will need to grow it. The problem with growing an established nursery business The first problem with growing an established nursery business is that many parents - and children, and probably staff - will prefer a smaller facility with a friendly atmosphere. They will actively seek out a small nursery, and be prepared to pay more for a place where there are not too many children competing for attention. Secondly, there are likely to be physical limits on the size your business can run, imposed by the premises you have. Small children need surprisingly large spaces, and you simply can’t keep adding to your roll every time a parent enquires. The chances are that if your nursery business is being properly run, it will be operating at capacity. There will be no room to squeeze in extra children, and you will probably already have a waiting list. “We don’t have any more space - even though we have plenty of parents knocking on our door.” Are you looking at ways to grow your nursery business? See how we can help you secure the finances you need The solutions You may be able to relocate your nursery business to another, larger location to overcome the restrictions of size, but relocation is always a challenge for any business. Many parents will not see your nursery as being the same in a new location. An alternative is to open a second nursery. This too can be a challenge. Your new location should be close enough to benefit from your current good reputation, but far away enough to not compete with your current site. If you can find suitable premises that meet all the needs of legislation, your business objectives and demanding parents, this will be beneficial. Ideally, your new venture should complement your old one. Smaller children might prefer a small and homely atmosphere where they can develop at their own pace. 30 to 35 places might be ideal as a compromise between an intimate and friendly environment for children and a viable business. Larger and more outgoing children might be happier in a more spacious environment with more opportunity for active play. It might be possible to provide 60 or 70 places with the right premises. Remember that you need to make sure that your first site can run without you before you can take on another. If you are the person who speaks to parents, deals with invoicing, organises the day, reads the stories and wipes noses, as well as the designated manager and safeguarding person, you cannot open another branch. You will have to bring in skilled people to work as managers who you can trust to work in your way and replicate your success. Remember, you can't be in two places at once, and you can't afford to take all your good staff from your first site to the second. You may also need to consider hiring administrative staff to assist you with the paperwork - remember your workload will already more than double if you have to fly between your venues all the time. Finding the right premises and the right staff will bring you up against another challenge - that of funding. You already know what the challenges are when it comes to funding your business, and setting up a new branch may involve similar costs. The most significant is likely to be your new premises - which will depend on the size and location of your premises, and where in the country you are situated. Next, you’ll need to consider staffing costs. These can also vary depending on where in the UK you are. There will also be the costs of equipping your new nursery. Fortunately, there is some good news when it comes to expanding your nursery business. If you have been operating successfully for a year or two, you will find that lenders are much more enthusiastic about lending to you - because you have proved the viability of your business and your own abilities as an owner and manager. This means that you should be able to secure the funding to grow your nursery business, and to open a second - or even a third or fourth - nursery will cost much less than it did to start up. A call to Rangewell might be the first step to arranging the funding you need, whatever the plans you have to grow your nursery.
Fastest Growing Tech Companies in London
When it comes to tech, London continues to be a popular destination for entrepreneurs seeking to bring pioneering ideas to market. From fashion, catering, hospitality to financial services, technology is changing the way businesses trade and interact with their customers, both on a national and international scale. So to celebrate the enduring success of British business, we’re taking a look at London’s 10 fastest growing tech companies, according to Deloitte. Deliveroo - At the top of our list is online food delivery platform Deliveroo, who has seen a rapid rate of growth 15,749% during the course of 2018, highlighting the burgeoning demand for takeaway meals. (Find out more here about finance for hospitality businesses) Checkout.com - Meanwhile, coming in at 2nd place is Checkout.com which has grown by 15,548%. A global unified payment processing platform originating from Switzerland and designed with the express purpose of processing payments in over 150 currencies quickly and securely. Hostmaker - Boasting a growth rate of 6,445%, Hostmaker swoops in on 3rd place. An award-winning rental property services provider, Hostmaker makes it easier for landlords to manage their portfolio and earn up to 30% higher yields in rental income. Adaptavist - Next up is up on this list with 4,024% growth is Adaptavist. An IT services provider offering premium professional services, support, hosting and licensed products to a wide range of national and international clients. Paddle - With 3,858% growth, Integrated software sales platform Paddle comes 5th on our list. A provider of checkout and licensing software designed with the express purpose of saving clients time so that they can support growth with ease. Onfido - Meanwhile, providing businesses with a secure way of collecting and validating customer details, fintech platform Onfido is 6th on the list, having grown by 3,857%. Stratajet - Coming in next with 3,651% growth is Stratajet, which offers a fast and cost-effective way of booking a private jet to any global destination. Ometria - With a handsome 2,905% growth, Ometria provides an innovative platform enabling retailers to market to and secure more customers. Lending Works - Having grown by 2,832%, next in the list is Lending Works. A fintech platform offering peer-to-peer loans, personal loans and investment opportunities. Thoughtonomy - And finally, with 2,905% growth, Thoughtonomy squeezes in at 10th, which is an automation platform designed to improve the way in which business technology engages and influences the customer’s journey. As such, what this list demonstrates is an ever-increasing demand for innovative technological solutions, both in business and on a personal level, presenting clear opportunities for entrepreneurs wanting to unleash new ideas upon the dynamic world of technology. And in support of this goal is Rangewell, who are dedicated to providing more and more business owners with the opportunities they need to support growth, whether it's finance for hospitality, construction, business or personal services. So as we approach 2019, isn’t it time you took your tech business to the next level?