The transformation from start-up to scale-up is not always easy. We look at how leaders can equip their businesses with the tools they need to facilitate rapid growth.
Not every promising start-up succeeds. Even those with the most innovative products or services can fail to thrive, as the task of establishing a small business gives way to the challenge of building a strong scale-up.
In recent years, Britain has created more start-ups than ever before, yet many fail to reach the next level. The entrepreneurial drive that carries successful start-ups through their infancy becomes less relevant as a business grows and faces new obstacles. For a business experiencing rapid growth – often fuelled by external investment – the entrepreneur’s natural journey from artisan, to hero, to meddler, to strategist, has to be accelerated. Where a start-up needs an innovator, a scale-up needs leadership, management and process. As the business faces each scale-up challenge, it can quickly become apparent that the entrepreneurial owner is not at the right stage of the journey to take the helm.
When it comes to accelerating expansion, success hinges on how well an entrepreneur can address managerial pain points, delegate tasks and professionalise to scale, laying solid foundations for growth.
Leadership vs. management
Leadership is not the same as management. A scale-up needs the skills of both to drive sustainable long-term growth. It’s up to the entrepreneur to address their strengths and weaknesses to decide where their skillset is best placed, which can be a challenging task. While some founders like to maintain a hands-on approach, taking care of the day-to-day running of the business with support from a dedicated senior team, others prefer to step back and focus on corporate vision. While this does mean relinquishing day-to-day control, it can provide a better vantage point to steer the business as it scales up.
Vision and purpose
A business without a clear vision for its future quickly loses sight of its purpose. A business without a sense of purpose quickly loses momentum. Through each stage of expansion, it’s crucial to communicate corporate values and the fundamental purpose of the business to those driving its growth, from senior management to junior staff.
As a business scales up, its needs become more complex. Whilst a start-up relies on the entrepreneur, or a few talented individuals, a scale-up needs the support of a fully developed management team and a network of experienced professionals: a scale-up ‘dream team’.
The scale-up dream team should consist of the Board, including management and non-executives, and the company’s trusted external advisers: its accountants, taxation specialists, corporate finance advisers and lawyers. Where appropriate, other key specialists - IT, regulatory, property or environmental consultants -can play a crucial role. Having a team in place to advise on these issues provides access to ‘best of breed’ advice and business practice, both of which are essential in the professionalisation of the business.
Smith & Williamson’s scale-up team brings together the core services required to meet all of your financial needs.
Smith & Williamson is committed to supporting scale-ups at every step of the journey; that’s why we are a founding partner of the ScaleUp Institute. Our help goes beyond our commercial offering, getting to the heart of scale-up needs to deliver bespoke advice and tailored solutions.
Access specialists at Smith & Williamson who provide commercial, taxation and financial advice to entrepreneurs and owner managers of growth businesses. There is no need to reinvent the wheel: we’ve been there and done it before.
Regular communication and access to thought leadership are at the heart of our programme to support the entrepreneurial and scale-up business community. Our programme of educational events and networking allows you to meet the experts and network with liked-minded individuals.
We are proud to have relationships with complementary, non-competing businesses, providing support for our clients and delivering a broad network through which we can connect them to the right people at the right time.
We make it our purpose to help fast growth businesses access the support they need, whether it’s through our in-house solutions or our external corporate connections.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on www.smithandwilliamson.com prior to the launch of Evelyn Partners.