Department of Wealth
Ambition for growth and achieving it, at whatever size and stage of the journey, are two very different things. In the UK, 99.3 per cent of SMEs have fewer than 50 staff. What makes any company scalable is the ability to identify a significant unmet market need and supply a product or service that satisfies that need better than the competition. The bigger the market need, the more you will be able to sell to meet it, and therefore the more likely and sustainable your scalability will be.
One way to approach this is by finding niches and market segments where you have the best fit and have the most significant competitive advantage. Then, highly effective marketing, business development and sales are the essential strategic business functions that enable you to capitalize on those opportunities and grow your market share.
A board is easier to attract if you can demonstrate your business growth potential and secure equity funding. Investors will often want to take a seat on the board to help their investment reap the rewards through increasing shareholder value – yours and theirs. Investing in an experienced mentor who has been there and done it, who has ‘got the scale-up T-shirt’, can also bring much value to you as you go through the early stages of growth and start to build these essential people resources.
Leaders have to be able to communicate transparently, now more than ever, and do so often, both formally and informally. They need to develop empathy, especially over mental health issues. They need to bind everyone with a customer obsession and building robust systems that provide value.
Raising money can be dangerously distracting for a CEO, but so too are continual cash-flow worries. If you drip-feed investment as needed every 18 months or two years, creating a cash runway, the CEO is free to concentrate on the critical things – the customers, his team and innovation. Each round should bring more support to the CEO.
Funding should cover all growth, hiring, sales, marketing and product. During this stage, 80 per cent of costs are likely to be employee related, so recruitment is doubly critical. Offering equity can also attract quality hires at under-market-level salaries. Plan conservatively, but be aware that over-funding makes waste too easy. Preserving cash must be an essential part of a company’s DNA. Cash is the fuel of growth.
If you focus on growth and profit, you create momentum and it happens. When you focus on your customers, sales happen. Focus on making your product something that will transform people’s lives and of compelling value and it will sell. Delight your customers and you will grow. Ensure your customers develop a strong dependency on you. Empathize with them, talk to them, work with them for the long term.
Ensure everyone loves the company and becomes a brand advocates, be it your team or your customers. Lead from the front with energy and persistence and concentrate on just four things: winning customers, retaining them, building your perfect product and hiring the best.
Businesses without any purpose may advance you in many ways in life, perhaps financially or socially, or by providing external validations of power, money and fame. They will not authentically advance you or give you a feeling that you have achieved something that truly matters. That business may last five, 10 years, but you, the entrepreneur, will not be advancing in any way you genuinely yearn to do.
