Go Big or Go Home: Why Now is the Time to Scale Your SME

For most SMEs, 2020 will have been the most difficult year they ever experienced. Many firms that fall into this category are constantly at risk of getting into serious financial difficulty because they don't have the resources to deal with market adversity or sudden drops in revenue.

Amid all the pressure created by COVID-19 in 2020, countless SMEs faced an intense struggle for survival. The pandemic affected every industry, from retail to banking, and had consequences for all kinds of businesses, but smaller companies will always be at the greatest risk of going under.

However, even during times of extreme adversity, the most ambitious firms focus not only on how they can survive, but how they can identify opportunities to grow and emerge from a crisis even stronger.

The need to look forward

Growth won’t always be a priority or a realistic goal for every business. But for those that have the fundamental strength and confidence to focus on expansion, success can depend on being proactive and preparing to seize opportunities whenever they arise.

There’s a lot to be gained from always looking forward, even during crises like the one companies experienced in 2020.

As Deloitte pointed out in its list of six imperatives for chief financial officers dealing with the impact of COVID-19, it's never too soon to think about your plans for the future.

The various steps businesses can take to prepare for growth, even during times of uncertainty, include:

• Identifying your critical talent needs and taking measures to ensure you have the right people in place to take the company forward
• Taking full advantage of digital transformation and leveraging technologies that’ll help you scale efficiently
• Looking at your supply chain and making sure you feel confident that it's resilient and reliable enough to support your operations as you grow

Focusing on cost-cutting and basic survival will be many businesses' first reaction during difficult times, but those that look to the future will be the best-placed to succeed once conditions start to improve.

Planning for scaling success

If scaling up is an ambition for you, it's important to come up with a clear strategy that outlines the practical steps you'll take to reach your long-term goals.

Firstly, you need to have a clear idea of exactly what those goals are. Ask yourself questions like:

• By how much does the business want to increase turnover, and in what timeframe?
• Do we want to enter new geographical markets or industry sectors?
• How much does the workforce need to expand, and what other HR changes could be required to support growth?
• How will the various activities involved in scaling be paid for? Will new lines of credit be required?

Finding the answers to these questions will help you get into a growth mindset and start thinking like a bigger business.

It's also important to feel confident that you have the fundamental functions and ingredients in place to facilitate scaling. Bringing in more sales is crucial, so you need to have a lead flow pipeline that's strong enough to generate the number of opportunities you need. Your sales team also has to be properly staffed and trained to convert those opportunities into revenue.

You can increase your chances of scaling successfully by looking at other companies that have gone through this process and studying their results. What did they get right, what mistakes did they make, where would you follow their example and where would you want to do things differently?

Be ready for the challenges

Scaling a business can be an exciting process that takes you to a new level of success and profitability. However, it can also give rise to some significant challenges, particularly for SMEs that can't match the financial firepower of big businesses and therefore have little room for error.

An essential part of the planning stage of scaling up is anticipating what your biggest obstacles are likely to be and coming up with a strategy to overcome them.

The ramifications of evolving into a larger company will be felt most keenly in the workforce. Your employees might have to transition from being generalists who can turn their hands to a range of tasks, depending on what the business needs, to specializing in a certain area where they can refine their skills and generate outstanding results.

People who’ve been with you since the firm's inception should have an active role in the scale-up process and should also be on board given that their role could change as you grow.

Another potential challenge to prepare for is your existing IT systems not being strong or reliable enough to meet your needs as the company gets bigger. This is another eventuality you need to plan for in advance, since you might not have the time or resources to fix problems that arise after your scale-up journey has started.

However exciting, challenging and all-consuming the process of scaling your business proves to be, it's vital to remember the basic ethos and principles that helped you get this far. Knowing your core company values and working hard to protect them should always be a priority, whether you're a brand new start-up or a multinational corporation.