Most of us in business will be familiar with the term ‘start-up’ and will have been there. But, has your business reached the stage of being a ‘scale-up’ and what does that mean? In a tech business, how do you go from one to the other? Here’s an introduction on how to scale-up in a technology business.
What is a scale-up?
There’s no set definition regarding what a scale-up is, and what it means to scale up your business. But it is a crucial part of the company lifecycle as it moves from a small start-up, to something much bigger.
One definition example is when a tech company has proven products and, or, services and is growing in its market coverage. It has an excellent financial track record with solid bookkeeping practices to monitor cashflow. There are employees of a sizeable number that are working full or part-time for the company.
Another example sees a three-stage process:
- Start-up = looking for a scalable business model
- Scaleup = looking for growth and market development
- Scaler = sustained market leadership and growth
Becoming a scale up
As a start-up, the aim is to become a scale up business and to move upwards and onwards. How to do this depends on what your company does, but there are some general ideas and concepts to manage.
A common challenge when you scale-up your business is finding staff with the required skill set, talent, and knowledge to fulfil the roles that you have available. There’s a general problem with skill shortages around the UK, and this is holding some companies back. Luckily, the tech industry has a slight advantage in this area. So, starting the recruitment process early and making it a comprehensive one is a crucial part of scaling up a business.
Your leadership skills as the owner, or your management team, can be another area that needs working on – if you are going to move the company up a notch. Not everyone is born a natural leader, and that’s okay. Either it is a skill you possess, need to learn, or find someone to bring it to the table.
Growing your revenue
Of course, the core part of scaling up your business is increasing revenue. Without it, you can’t pay for more staff, develop new products or invest in tech to offer additional services. You need to market the company effectively, studying how you can find new ways to bring revenue into the business. Product research and market knowledge are essential if you want to grow your business and move to that scale-up stage in the company lifecycle.
You may even want to consider mergers and acquisitions at this stage. Horizontal mergers are between two companies in the same industry while vertical mergers bring together companies from different levels of the supply or value chain.
Time is right
Knowing when your company is ready to scale up is something that isn’t always easy, but then there’s no set definition – you can judge your company on what you think to be right. But as you move up, you can continue to grow, and there’s no limit to what you can accomplish.