You’ve founded your startup, you’ve been through the MVP phase and the business is now established in the market – but are you ready to expand at pace; to scaleup?
Scaling up isn’t for everyone – world domination isn’t on the agenda for every founder, after all. But if you’ve got a winning business idea, the backing of the best possible investors and advisors, and a highly positive mindset, stepping up to scaleup could be your key to success.
Christopher Blunn, Associate Partner at Haines Watts London, talks hypergrowth, scaling up and the need for a new working mentality when your startup is ready to take the next step.
The fundamental difference between a startup and scaleup
The number of UK startups continues to rise, especially within the London-based technology sector where the barriers to setting up are relatively low. But once your tech startup is established, what’s the next logical step?
If you’re growing, increasing your customer base and your foothold in the marketplace, you may need to ask yourself the question ‘Am I a startup or a scaleup?’
So, what is a scaleup? The Startup Europe Partnership defines a scaleup as:
“A development-stage business, specific to high-technology markets, that is looking to grow in terms of market access, revenues, and number of employees, adding value by identifying and realizing win-win opportunities for collaboration with established companies.”
These kinds of definitions help us understand what a scaleup is – an ambitious startup that has highly aspirational plans for hypergrowth. But, for me, it’s as much about the mentality of the founders and the management team.
Having the right mentality to ‘think big’
If you’re going to make the leap from established startup to fledgling scaleup then you’re going to need to think bigger – and that’s going to mean thinking about HOW you get bigger, what tools you need and how you get the confidence to take that next step and aim for hypergrowth.
The mindset and motivation of the founders is central to this.
If you’re a successful startup, you absolutely don’t have to become or even want to become a scaleup – we can’t all be the next Elon Musk and nor should we all want to, as he says himself in this revealing interview.
Some people just want to build a lifestyle business that creates a comfortable living and has capital value for a tax efficient exit either within a defined timeframe or whenever their appetite for retirement grows louder in their gut – and there’s no shame in that. In fact, some of my most profitable (and contented) clients have run highly efficient businesses on a smaller scale.
But if you do have grand ambitions, then scaling up will be something that must be carefully planned. If you’ve got a great business idea and a desire to grow, then you’ll need an ambitious mentality and relentless energy to make a go of it.
Scaling up won’t happen organically. You’ve got to set, and deliver on, ambitious targets, and all within a defined and unforgiving timeframe. There’ll be pressure to do so from investors or competition, and often both. So how do you do that? How do you change gear and start laying the foundations for a scaleup business?
Laying the foundations for scaling up
If you have a business concept with the potential to be scaled, what are the key things you need to think about and plan for to achieve this?
Having the right funding is always going to be critical to your scaleup plans. And an understanding of the hard work needed is important too. But, without wanting to over simplify the whole process, scaling up requires three basic things.
Scaling up successfully will come down to:
- Having the right financial support and financial management – you have the funding you need to scale and the best possible oversight of your financial performance, forecasting and profitability levels.
- Having the right mentality and team culture – you have the ambition, determination and positive mindset to achieve hypergrowth, and a team of people who believe in you and your idea.
- Having the right advice – you have the support of the right advisors, the right business services and a trusted personal connection with an advisor who will help you to achieve your scaleup goals.
It’s not just about having enough money to scale. You need to have a clear plan of how you’re going to spend it, how you’re going to structure the business, planning where and when resources of all kinds will be needed, and deadlines.
Supporting your scaleup evolution
If you’ve been happily jogging along doing an occasional 5k run on a Sunday, you’re going to need do some serious training and planning to suddenly run the London Marathon – and it’s the same going from being a successful startup to becoming a lean scaleup business.
That change in mentality and outlook is fundamental to achieving your scaleup aspirations. And a big part of our job is to instill in you that feeling of ambition and confidence.
We’re often counsellors as much as we are accountants and business advisers, which is what any valuable business advisor should be.
End-to-end support for your scaleup
For startups that have a scalable business idea, we can help get you started, assist you through your MVP phase and help you become established in the market. We can then get you prepped and ready for the scaleup journey – if that’s your goal. And if it is, we can help to give you the confidence to achieve it.
With the right money, mentality and advice, you can shoot for the sky, Mars, or distant stars. Where is the limit for your scaleup?
Talk to one of our London Business Advisors about starting your scaleup journey.
Haines Watts work with fast growth London startups and scaleup businesses.
Want to know more? Call us on 0207 025 4650 or email email@example.com