From kitchen table to boardroom: Supporting Surrey's growing businesses
PUBLISHED: 11:33 23 March 2017 | UPDATED: 11:33 23 March 2017
Is your business structure fit for purpose? Have you explored the options available to support investment? Do you have the right personnel in the right places to manage growth?
Surrey is well placed for business investment with an economy of £39 billion; bigger than that of Birmingham, Liverpool or Leeds. It has a long-standing heritage of research and innovation and according to StartUp Britain, there were 1,132 business start-ups in Guildford alone in 2016.
Recent figures indicate that of the 61,900 businesses in Surrey, 99.5% of them are small to medium enterprises, employing fewer than 250 staff and 88.2% are micro businesses, employing less than ten staff.
This trend demonstrates just how entrepreneurial Surrey residents are. So how do you take your business from the kitchen table to the boardroom?
Often businesses evolve naturally. In the early years of founding a business, all the energies of the entrepreneur are rightly focused on getting the business up and running and making it successful. Thoughts of future succession or exits through sale are not high on the agenda. While you are busy being entrepreneurial, it is easy to overlook the practicalities required for stable growth, for example ensuring that your legal structures are in good order.
Our experience of working with successful and often ‘serial’ entrepreneurs reveals a common characteristic, that in order to grow, there must be a professionalising of the business on a number of levels, without losing fundamental values. This means that appropriate underlying structures must be properly considered and put in place.
Another common characteristic is investment uncertainty, with entrepreneurs questioning how can they retain control over their businesses as they grow, particularly if funding is coming from external sources? Often entrepreneurs invest their own funds or simply follow traditional routes of bank finance to try and maintain sole control of their businesses. Whilst traditional funding is a viable option, there are other investment opportunities available. Bringing in external investment can assist not only from a financial perspective but a private investor may also introduce their expertise as well. A good example of this are Angel Investors, who bring with them substantial business and operational experience which fledgling businesses can benefit from. One major advantage of Angel Investors is that they are investing their own funds, rather than investing on behalf of third parties and therefore can take a more flexible view on matters; such as their degree of control or influence over the business.
Growing your business is more than simply increasing your sales or improving your products and services. You may need to hire more staff or train your existing staff to handle the larger business requirements. While increasing your workforce brings its own challenges, having the right people doing the right jobs is essential to achieve your goals and objectives.
Many of the most successful businesses are family businesses and unsurprisingly, the South East has the highest concentration of these in the UK. While growing any business can be a challenge, family businesses have their own specific issues; particularly around succession and the involvement of family members. As children come along and start to grow up, the founder may consider involving them in the business and family succession may become a realistic possibility. However, there is no guarantee that capable, motivated successors will be found in the next generation. Even if the next generation is well suited to take over, they may wish to choose alternative career paths. Family business owners need to consider the introduction of external expertise at all levels of the business and also to focus on how to attract, retain and motivate their staff.
It may be helpful to have a mentor working alongside you to share skills, expertise and experience and contacts. We are working with Family Business Place, a specialist advisory service to family businesses, to develop Growth Clubs for family businesses to enable local business leaders to meet and share and tackle their biggest challenges. The Guildford Growth Club launches in May, if you would like more information on this please contact firstname.lastname@example.org.
Questions to consider
• Is your structure the right one for growth? - For example, if you are a sole trader, would you be better to incorporate or go into partnership.
• How will you funda any growth? - Investing more means that you may need to take out loans or bring in outside investors or look for other sources of financing.
• Do you have the right people working in and managing your business? - Being open to external expertise and belonging to a business club or network to learn from other’s experiences can be hugely beneficial.
Charles Russell Speechlys provides specialist insight and advice across the full spectrum of business and personal needs and can offer holistic legal support to businesses throughout their lifecycle. For more information please contact Sally Ashford or Geoff Sparks on 01483 252525 or by email via email@example.com or firstname.lastname@example.org.