RSS feedsJohn Dunsmure
Managing director, British Chambers of Commerce
All too often businesses at this stage in their development get distracted by the red tape, processes and systems that come with growth. For creative businesses this can spell disaster the talent needed to maintain your growth is often not motivated by following rules and filling in forms. Over-burden your staff with rules and you will take their energy and time away from driving growth.
Equally, the founder’s talents are drawn away from the greatest contribution they have to make looking after customers and coming up with new ideas. You didn’t go into business to be an accountant, did you? You have already seen the benefits of outsourcing non-core functions with your IT: build on that experience.
Either find an external partner company to manage your HR and finance functions and provide you with critical advice or find a highly experienced freelancer to support you on a part-time or ad hoc basis. Utilise your IT investment here too invest in an HR or finance system to do the hard work.
Be clear on the services you need and buy them in avoid adding significantly to your salary bill. The right mix of consultative and day-to-day administration skills means you can focus on what really matters and benefit from solid advice to help you grow.
Robert Fraser
Director, Saffery Champness Corporate Finance
The importance of a clear business plan in helping manage growth should not be underestimated. With Article 10 having diversified its activities, targets for the divisions should be set against which performance can be measured and controlled. This helps provide the focus essential for growth.
A business plan should also show how the company is to be run, so their plan should be regularly revisited and progress checked against targets even more important at times of rapid growth or challenging economic conditions.
Lyndon and Dale should look at getting outsourced help to ease the burden of HR issues. Of course, they need to maintain an overview of developments, but as the business expands their time will be better spent in a strategic, rather than ‘hands-on’ role.
Strong cashflow and tight cost controls are always important, but especially when a company is growing rapidly or the economy enters uncertain times. Article 10 may have a strong balance sheet but its customers may not.
Finally, the founders should be conscious of the importance of maintaining good relations with financiers and professional advisers. If necessary, it will be easier to organise a fundraising if these relationships are in place and they are working from a position of strength, rather than attempting to play ‘catch-up’.
Matthew Wilshaw
Professional specialist, HSBC Bank
This is currently a successful business that has grown through delivering excellent customer service. The key to managing rapid growth is to ensure the right processes are in place for both front office and, more importantly, the back office infrastructure. Lyndon and Dale have made some excellent decisions to recruit three specialists who will be responsible for strategic media, event management and marketing. This will also help increase sales, so I would recommend employing an operations manager who will ensure that the business does not over-trade and apply unwanted pressure to the back office support functions.
While Article 10 has traditionally funded the business through retained profits, it is often necessary to ensure a more structured approach is taken. As debtors increase and work in progress becomes more of a challenge the business could look to introduce ‘confidential invoice finance’, which will provide working capital to fund the period of growth. It also acts a platform to fund any acquisitions.
While we expect the economy to slow, building long lasting relationships by providing outstanding customer service, properly funded, will see them through any economic slowdown.
