For many – although not all – small businesses, there will come a point where the concept of one person doing everything is no longer feasible and the founder will need to bring in additional support to help it to scale up and achieve its potential.
At a basic level, this could include using specialists to look after elements such as accounting or IT, but in time it’s likely that more support will also be needed around the core focus of that business. For those who realise they need some extra help, there are a variety of options.
Involve family and friends
At a basic level, this could include using specialists to look after elements such as accounting or IT, but in time it’s likely that more support will also be needed around the core focus of that business. For those who realise they need some extra help, there are a variety of options:
This can be an easy way to test out bringing in some external support. “As someone who measures trust and reliability equally to performance, it has worked well for me,” says Lucie Macleod, founder and CEO of Hair Syrup. “Having friends and family involved in the business means you’re at a significantly lower risk of being taken advantage of, lied to and even stolen from, and there’s a deeper level of trust which plays to both parties’ advantages.”
But she does admit that it can cause tensions with relationships. “My mum has worked for me for over three years and it’s never been without its challenges,” she says. “One of the trickiest parts of it is maintaining boundaries. Some weeks you talk about little else except work; it can be intense.”
Rick Smith, founder and managing director of Forbes Burton, agrees there are potential downsides. “Roping in friends and family doesn’t expose you to the same financial risks but can disrupt the day-to-day operations of your company,” he points out. “Being there as an informal helper can understandably cause some to take their role less seriously, potentially harming your company’s productivity.”
Use freelancers and contractors
Bringing in external support from freelance or contract labour has several advantages. “Contractors and freelancers allow employers to pay per project without long-term commitments,” says Jake Darlington, SME manager at Sapphire Contracting and Accounting. “This flexibility also improves scalability, as a business can easily adjust resources based on its needs.”
This was the strategy Amy Dawson, owner of PR and copywriting firm Gatekeeper Communications, took when she realised she needed extra help. “I immediately knew that I was looking for an extension of myself so finding someone ‘cheap’ or ‘inexperienced’ wasn’t an option,” she recalls. “I needed to have confidence that any submitted work was ready to use straight away and would be delivered in time with my deadlines and expectations.”
It’s important, though, to ensure appropriate controls are in place. “When using contractors, don’t agree anything on a handshake,” advises Amy Pierechod, partner and head of start-ups and emerging companies at law firm Gordons. “No work should be done by an external provider without a contract documenting the rights, obligations and expectations of all parties.”
It’s also essential to make sure that any working arrangement complies with the law, warns Lydia Wawiye, a litigation solicitor at Parfitt Cresswell, as freelancers, contractors and employees all have distinct legal implications. “Misclassifying workers can lead to legal challenges, particularly if a contractor is later deemed to be an employee,” she says.
“To avoid this, clearly define the relationship in written agreements and ensure that the reality of the working arrangement aligns with the contractual terms.” Freelancers will typically have more control over how, when, and where they work, she adds.
Employ someone
Hiring someone can be a good way to grow a business on a more permanent basis. “Hiring employees is a long-term investment that can lead to increased reliability compared to agency staff, who may have fluctuating availability,” says Darlington. “Employees also tend to take ownership of their work and develop a deeper understanding of the business.”
Making sure the numbers stack up, however, is important, and it may be that a phased approach is a good option. “Hiring part-time or flexible staff provides a stepping stone before taking on full-time employees, allowing companies to test demand without immediately increasing overhead,” says Yannick Dillen, professor of management practice in entrepreneurship at Vlerick Business School. “The cost of a full-time employee might be a heavy burden for a small business as the cost should be lower than the extra margin – and not the turnover – that is made on sales to justify the hire.”
Employing people takes business owners into new territory, and means they need to comply with all relevant legislation, says Ella Bond, senior employment law solicitor at Harper James. “This means issuing a written employment contract, setting up PAYE, enrolling eligible employees in a pension scheme and adhering to minimum wage and working hours regulations,” she says. “Employers should also have an employee handbook in place to assist in governing how the employment relationship should operate.”
Owners will also need to be alert to any upcoming changes, such as those included in the Employment Rights Bill. “These include the right to request for flexible working conditions, restrictions on the practice of ‘firing and rehiring’ and more stringent rights for employees during probation periods, protecting them from unfair dismissal from their first day at work,” says Smith.
Franchising
For some businesses, franchising can be an option, particularly in the case of local businesses looking to expand into new geographic areas. This was the route business partners Caroline Gowing and Vicky Matthews went down with virtual assistant company Pink Spaghetti in 2009.
“We felt more confident that franchisees would be better placed to establish high-performing regional offices than employed managers,” says Gowing. “I would say you need an absolute minimum of two years’ trading under your belt – with evidence of profitability and replicable processes – before you start franchising.” Anyone looking to go down this route will need to engage a lawyer to produce a robust franchise agreement and potentially a consultant to help document business processes, she adds.
Identifying the right growth strategy will depend on the business’s current situation and ambitions, suggests Dillen, as well as a bit of trial and error. “It’s a good idea to test strategies on a small scale before fully committing, and starting with short-term contracts or trial periods allows flexibility,” he says. “And keep listening to what your customers want. Creating a structure for a business cannot be done properly without knowing exactly what the needs of your main clients are.”
Read more
How to grow a business with a tricky-to-scale product – Former ‘The Apprentice’ star Elizabeth McKenna shares how to scale up businesses centred around a product that’s difficult to scale
Three tips on growing your restaurant business – Here, recognised chef Richard Irvine gives some pointers on how to improve your restaurant business
Setting up a franchise vs growing a business organically – Franchising expert Rik Hellewell discusses the advantages of setting up a franchise compared to growing a business organically – and shares his tips on why franchising can be the ideal way to expand in business
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