How to scale your business – part one

How to scale your business – part one

Your business is established.  Your customers keep coming back time after time, and they are recommending you to their friends.  It’s time to move to the next level.

When we look at the next level for businesses, we talk about growth and we talk about scaling.

But what does that really mean and which should you be doing?

The difference between growing and scaling

Growth is about increasing your revenue in linear terms.  You add resources, such as capital, people or technology and your revenue increases as a result.

Scaling on the other hand is when your revenue increases without a substantial increase in resources. You can expand without being hampered.

For example, take a food truck which cooks and delivers take away meals.

Business is good with lots of customers. The standard of cooking is high and all meals are consistently well made and delivered warm and on time.

If you’re looking to grow an obvious thing to do is to replicate what you’re doing with your first truck. You buy one or more new trucks and hire a different person to run that truck, cook the food, organise deliveries etc.

Your revenue will increase, but so will the resources to maintain that growth.  Resources that will often drain profits, time and energy.

Scaling: taking a different approach

If you scale, however, you take a different approach.

Scaling is about increasing revenue without incurring significant increased costs to the running the business.

It’s about finding ways of doing things more efficiently in order to keep the costs down and be able to grow faster than previously possible.

Think about these problems within the growth business:

  1. How do you maintain consistently high-quality food when you have many more trucks in different places with different people cooking?
  2. How do you manage the different food truck owners to make sure the deliveries are done effectively, avoiding longer waiting times and deliveries of food that’s not warm enough?

You’re stretched having to train 5 different chefs, the delivery drivers are inconsistent, and you’re limited in the amount of food you can supply for both take-away and delivery because it’s all coming out of individual trucks.

We need to start thinking differently.  To look at how the business can work with less resources, to be able to expand your current reach, potentially even reach new audiences, or unlock new markets without adding to the costs.

So with our food truck example, rather than replicating the model, we look at how else the business could run.

  1. Multiple food trucks: But the food is prepped in a central kitchen and then delivered just before service to be finished off.  This allows you to maintain high-quality food.  It can be cooked more quickly at the truck because it’s already been prepped and so you can serve more customers per truck.
  2. Delivery is conducted centrally: Rather than delivery drivers going to each truck, they go from one central location, where the food is cooked fresh.  Control over quality, control over delivery times and no distractions for those who are serving in the trucks.

Rethink the model and you’ll be able to grow faster than previously possible.

How Streamlion can help

At Streamlion Consulting, we are experts in knowing and advising on the difference between growing and scaling your business.

Our scale-up workshops are designed to help entrepreneurs face exactly this type of challenge. We spend time looking at your business, acting as your trusted advisor to help you to make the decision that’s right for you and your business goals and aspirations. And we can then help find funding for this type of expansion.

We are experienced and trusted by many of our clients to step in and help with this process as and when further scaling up means more funding is needed. We can give you the peace of mind that you haven’t missed anything when planning the future of your business by acting as your trusted business advisor.

If you’re interested in finding out more, contact Helen on helen@streamlionconsulting.com or call 07790 493033.

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The importance of the credit check when starting a new business

The importance of the credit check when starting a new business

Starting a new business is daunting at the best of times, but when you need to consider a loan in order to get set up, it goes to another level.

Funding is such a vital part of getting set up for product businesses; buying stock, renting premises etc. but it can feel that lenders are holding back, making you doubt whether or not you want to continue on the journey.

At Streamlion, we’re really proud of our high success rate when it comes to getting start-ups off the ground but there is one area that prospective business owners can do to really maximise their chances of success.

Making sure you understand your credit history and your credit score. 

What does that mean?

Your credit history and credit scores are vital pieces of information that lenders use to understand your financial wellbeing.

They tell the lender a lot about you – how well you have repaid debt in the past, if you have missed any repayments on mobile phones, utility bills, rental/mortgages and also how much you owe other people.

Lenders will never want to add more debt to your burden, so they always make sure you can afford the loan repayments before approval is granted.

Your aim is a fair to good credit score.  So, before you start looking for any funding, it’s worth looking at your credit score to make sure you won’t fall at the first hurdle.

What do you need to do?

You can check your credit score using one of these sites.

All three of the above allow you to carry out a free check on your credit score.

An Experian credit score is out of 999. ClearScore credit checks are out of 700 and Equifax are out of 850.

All these will tell you what it is and how it compares to the national average.  A healthy credit score means you can apply for any funding you want with confidence.  This tends to be a score that is fair to good or above.

The website will also give you guidance on areas that need attention.

What happens if my credit score is Very Poor or Poor?

The good news is that you can do something about it.

When you get your credit score, you will be able to download your credit report as a PDF.  This will give all the detail you need to help you understand what has influenced your score.

The sorts of things that can negatively affect credit scores are:

  • Late or non-payment of bills
  • Being close to credit limits on overdrafts or credit cards
  • Too many ‘hard’ credit checks – these are checks carried out by lenders & creditors in the past
  • County Court Judgements (CCJs)

Whichever company you use to check your credit score will be able to help you to improve the score.  Just get in touch with them directly.

And ongoing?  What to do……

It’s good discipline to check your credit score every month. Many of the websites will offer the chance for an automated update to be sent to you. This means you will know of any issues at an early stage and can take action to remedy them.

Then as soon as you’re ready, you can apply for the funding you want with confidence and achieve your new business dream.

Streamlion specialises in helping entrepreneurs starting on their business journey.  We help you create a business plan and finance details which ensures that your loan application will be successful.  We can give you the peace of mind that you haven’t missed anything with your loan application by acting as your trusted business advisor.

If you’re interested in finding out more, contact Helen via helen@streamlionconsulting.com or call 07790 493033.