Considerations for Fast-Growing Companies
The UK is fertile ground for the world’s fast-growth companies and our firm alone looks after three of the fastest-growing companies as listed in the Fast Track 100.
Thanks to these relationships and previous work conducted by the firm we have built up considerable expertise in this area, which has allowed us to understand what makes fast-growing companies tick.
From our experience, the most important thing when working with such entities is to be forward looking and proactive. Hence, we have come up with a seven-step plan for preparing your business:
1. Agree the destination
Every journey starts with a destination in mind and so should a business. Whilst this may change as the company evolves and develops over time, without an end goal, often precious resources such as time and money are wasted.
Therefore, the first questions which should be asked are:
“Where do we see the company in five to 10 years time?” followed by “Is there an exit strategy?”
Admittedly, with the constant and fast paced change in fashion, trends and technology, it is impossible to predict the future. However, understanding the initial expectation of growth and appetite for an exit at an early stage is key to providing constructive and targeted advice.
2. Decide on the route
There are often multiple ways in which one can achieve same end goal and much like a journey the differences can come down to price, speed and comfort.
With sufficient capital it is possible to grow quickly whilst employing the numerous staff required to support the business. However, this can come at a risk of inefficiencies and sacrifice in ownership.
Alternatively, one can grow organically, slowly and carefully without incurring high costs and pressure. But in this instance, you risk being beaten to the post.
What may be appropriate for one enterprise is not always appropriate for others and sometimes it may come down to how the owners want the business to be managed and their own work/life balance.
That said, it is important to decide your route upfront and in doing so, formalise this in the shape of a business plan.
This is does not need to be a structured document set in stone but can be fluid tool to act as a road map for the future.
Should you then choose to change your route and take on investment to drive growth or slow down to take stock then this document can be regularly updated to help guide your direction.
3. Find your navigators
It is important to ensure you are surrounded by the best advisers for your business, from accountants and solicitors to recruiters and IT support.
You want advisors who show a true interest in your Company and its future and who value your business as much as you value theirs. However, at the same time, you want someone who can not only deal with the issues you face today but someone who knows what you are likely to face in the future and has the experience to handle such requirements.
Forging strong business relationships at an early-stage helps ensure that the advisers stay with you as you grow, learn your company’s needs and can help steer you in the right direction.
4. Choose your vehicle
The way in which a business is structured can have a significant impact on how it is run, how much tax it may be liable for and the opportunities available to seek further investment to aid its growth. Not to mention that the business structure can also have a considerable impact on an eventual exit strategy.
5. Prepare for the journey
When planning for a long haul you make sure everything is working before setting off, that way you don’t experience any stressful setbacks on the way.
Often the idea of setting up the back office is last thing on an Entrepreneur’s mind. However, from our experience we have seen many Companies tripping themselves up once the growth kicks off, as they are trying to catch up with their record keeping which falls further and further behind as the volume of transactions increase.
This often results in errors, delays and mis-information which can be a large distraction from ultimately running the business.
Fast growth businesses need to be agile so that they can quickly react to new opportunities or issues as they arise. Owners should not be tied down with compliance.
Thankfully, advances in technology now mean that many processes that once required people power can now rely on automation. This is an area where we have invested significantly and can advise owners in detail.
By automating many processes, such as invoicing, payroll and reporting, owners can instead focus more on strategies to further grow their business.
6. Look out for potholes!
Much like driving on out British roads, business can hit a number of potholes on their journey and the biggest and most common hole for fast growth companies is cash flow.
It can be easy for Companies who are re-investing their profits at a rapid rate to lose track of how much money is actually moving through the business.
By keeping tabs on cash flow these businesses can gain a greater appreciation of how the business is performing and whether there are any seasonal pinch points or upcoming shortfalls.
Using cloud-based tools such as Futrli we can help develop forecasts which can then be kept updated on a real time basis, warning businesses well in advance of any upcoming shortfalls.
7. Enjoy the Scenery
Next year we are hoping to hold a series of workshops at our office in Colindale via our new Biz Camp initiative. This will cover a wide range of topics ranging from marketing to the creation of a business plan that are aimed at helping businesses to grow and succeed.