How do I know if my business is a Scale Up?
Business is booming. Your product is flying off the shelves. You’ve smashed your start up targets. At this point you’re feeling pretty confident demand is, and will continue to remain, strong. You know what your customer needs, wants or will require as you’ve got a robust product development roadmap in place.
But the questions still whir around in your head: How do I know if I’m a scale up business? Or, Can I become a scale up business?
Scale up differentiators
Let’s explore some of the factors that come into play when you’re teetering on the line between start up and scale up.
According to the ScaleUp Institute, if you’ve consistently grown your turnover by more than 20% each year for the past three years, then you could be classed amongst the growing number of scale up businesses in the UK.
Finances, are often a good starting indicator, however it’s often a collection of factors that firmly place you within the scale up category, including:
- Processes – you’ve got systems in place that have progressed since you first started your business. By now, you may be implementing or have already implemented systems and they’re working well for you
- People – there’s a team in place that wasn’t there when you first started, and the pace at which you’re growing means you’re constantly on the look out to add more top quality people to it, the financial success you’re having is being reinvested to enable growth, and
- Product – you’ve managed to successfully build a reputation in your market for your offer, but the time has come where you need to think hard about making product changes to ensure they do not impact your customers badly, if they’re significant
If you’re ticking these off, you’re in scale up business territory.
Easily done
You may be wondering how easy it is to reach scale up status. Fast, disruptive or innovative growth of your products and services, that offer consumers new ways of tackling current or critical problems, may feel like a tall order to fulfil. On average 4.3% of all start ups in the UK ever show grow of this type, reports the ONS.
Getting the product, people and processes right, as well as a structured approach to your finances, all determine your start up’s rate of progress and graduation to scale up status.
With more than 2,000 businesses set up every day, data from Micro Biz Mag of those set up in 2016 shows that only 38.4% of them continued to operate for 5 years. So the chances of becoming a scale up can be slim, especially if there’s no plan or vision moving towards the goal of becoming a scale up.
Investment strategies
After some initial start up success, businesses can find they’re working harder but not smarter. Resulting in a plateau or creating a prison in which the work they once loved in draining, with the needle no longer moving.
In order to realise your target of becoming a scale up, you’ll first need to take action to get the process, people and product in good shape. This will allow you to free up time and energy to define the next set of goals which will be the driving force towards becoming a scale up.
Plans should assessed and prepared to reinvest the financial successes you have gained in establishing your business, in order to unlock future phases of growth. Consider training, development and resources to support the next phases of your journey, because without them you’ll be may be creating barriers of your own making.
If you can’t say for certain you’re on the edge of becoming a scale up.
Do you know which one of the factors above could be the key to enabling you?