Scale up: how can innovative businesses achieve their high growth potential?

Businesses today are scaling faster than any other time in history. According to the latest ONS data there are 33,445 scale-ups in the UK and it’s been reported by the Scale-Up Institute that 10% of the UK’s scale-ups are located in the South West.

Getting your business to the point of needing to scale is no mean feat. Scaling up for a sale – if that’s your end game – will require advice from specialists. When a company grows at speed, having an adviser by their side who can scale with them creates value for founders and shareholders.

What do you need to consider when scaling up?

To realise your vision and growth potential, you’ll need to consider different aspects of your business. Scaling your business will involve raising the funds to finance the next stage of your growth, managing risk and compliance, protecting your intellectual property (IP), maximising your R&D tax credits, futureproofing supply chain and technology, and recruiting, retaining and incentivising your team. At Deloitte we will work through all the options with you.

Here are some pointers or questions to ask yourself to keep you on track in your growth journey.

Capital raising

It’s no surprise that there are numerous routes to fund raising and financing your company. These will differ depending on where you are in your growth lifecycle, and what your company’s vision and goals are. At Deloitte, my colleagues and I can help you to navigate through the complexities and considerations that come with raising capital such as:

• What funding does your business need at each stage of growth?
• What are the best options to fund your business?
• How do you raise capital, without over-diluting your shareholding?
• When is the right time to exit, and what is the best exit for you and your business?
  

Risk and compliance

High growth businesses create value at pace, which can erode quickly when risks are overlooked. As the business grows, the risk and compliance obligations grow with it and it’s important to navigate this whilst allowing the business to innovate and flourish. A risk strategy that also provides room for innovation can be instrumental in protecting customers, employees and shareholders. Start by asking yourself these questions:

• What are the tax thresholds that apply as you grow?
• Does the business need an auditor?
• Are you getting the best tax advice – using your R&D tax credits, maximising tax attributes?
  

Intellectual property

Intellectual property is the most valuable asset for most scaling technology companies, and so it must be built, protected, and valued. Creating a clear IP strategy at the earliest opportunity is key to developing, managing and monetising your intangible assets. At Deloitte, we have teams that work with clients to support them at each stage of their IP journey. To help you get started, think about these areas:

• What do you need to protect?
• How can IP support your business’s short and long-term goals?
• When should you patent IP?
  

Supply chain and technology

As your business grows at pace, you need a technology infrastructure that can scale seamlessly. Financial reporting needs to be flexible as strategies tilt and pivot, futureproofing for international growth and acquisitions.

Enterprise resource planning (ERP) is key - when should you run an ERP selection and implementation? This will consider if the business is properly protected against cyber risk and what would happen if your major supplier can no longer deliver to your requirements.

Workforce

There is a skills shortage so how do you recruit, retain and incentivise a top team? Securing the best talent for your business is fundamental to your long-term growth. Best in class reward strategies need to be considered alongside employment law risks and solutions, and employee experience is also gaining importance in the war on talent.

In the South West, the FinTech and MedTech community is relatively small and losing key people to other companies is a major concern. That’s just one example of why it’s also important for high growth companies to protect the business from employee competition. At Deloitte, our team of advisers can help you with your talent and business strategies that relate to post termination restrictions, such as restrictive covenants or confidentiality provisions that are tailored to your business.

Whatever your business, scale-up has to be achieved with clearly defined goals and a solid strategy. Strategy is about making choices to win in the marketplace, and this may involve modifying existing initiatives or redirecting resources to generate the most impact. Having the right advisers by your side is important, a team who’ll support you in making the right decisions and in defining what it is you need to win, today and tomorrow.

How we can help

The rise of innovative scale-ups is transforming the way industry operates. At Deloitte, we want to partner with the industry leaders of tomorrow, providing advice and solutions designed specifically for innovative enterprises scaling at pace today.

We’re well placed to help support the unique growth challenges that scaling businesses face in their lifecycle. There are many different ways our involvement can act as a strategic partner in your growth journey, ranging from on-site expertise, providing experience in areas you may be lacking, through to assisting as and when you need us, as a strategic adviser.