The Covid-19 pandemic has stalled the growth hopes of thousands of UK businesses. According to the Future of Growth Capital report, published in August 2020 by the ScaleUp Institute, Innovate Finance and Deloitte, over 70% of fast-growing scale-up companies are now in sectors most affected by the lockdown such as construction and retail.
But not all owners are on their knees. There have been crisis winners including, online retailers as shoppers shun the high street, and health tech firms helping to fight the virus.
One firm not being handicapped by the pandemic is Play More Golf, which links up with UK golf clubs to offer less expensive, flexible membership for players. Since launching in 2016 it has scaled quickly to partner with 250 clubs, attract 10,500 members via its app and doubled revenues year-on year to £4 million.
“When courses closed in March, we quickly offered people extra time on their membership to stay,” explains founder Alastair Sinclair. “When we got to May and golf was one of the first activities to re-open we got a crazy daily increase of enquiries of 1,500%.”
Another firm which has continued to flourish is Remedy Health, which produces and sells bespoke 3D printed nutritional food online. Founder Melissa Snover says its first product – Nourished – has recorded 30% month on month growth since lockdown. “There is a bigger focus on people getting healthy,” she says.
Both firms are determined to keep scaling in the months ahead. Play More Golf aims to once more double revenues this year as the recession hits and golfers seek cheaper playing options. It also aims to expand its product internationally into Spain, Portugal, and France next year and launch new white-label products to attract more luxury golf clubs.
Focus on R&D
“We are working on our software and new R&D to ensure we can meet the demand,” Alastair says. “But scaling is also about being nimble and listening to your customers’ needs. It’s a rapidly changing marketplace.”
Melissa is also continuing to scale and expects 500% revenue growth this year. The expansion includes launching a new kids’ range this Autumn using its patented technology. “We listened to our customers saying their kids would love it and we are delivering,” she says.
Paul Excell, managing director of the ScaleUp Group, says Alastair and Melissa are following many of the key scaling up steps vital in troubled times.
One main area is focusing on cashflow and capital and securing finance to fund investment. “Every pound counts in marketing, sales or customer acquisition,” he says. “You need to maximise recurring revenues and look at streamlining your processes to be more efficient.”
Obsess over customer needs
Paul also emphasizes the need to ‘obsess' over customers both existing and new. “How are your customers feeling, what do they need to be successful, are your delivering your promise? Plus, how can you develop business processes, models, product portfolio, and people to cost effectively address new growth markets and customers?”
Indeed, start-ups should create a strategic plan with clear growth targets and communicate it well with all functions and departments to ensure they are on board with it. They should also identify any skills and knowledge gaps in their teams and invest in training.
But a growth plan is not enough. Execution is key. Owners need to build a scale-up collaborative growth and delivery culture throughout their organisation. “Lead by example and inculcate a supportive, empathetic growth mindset, cause or purpose within your team and partners. Your people should be getting up in the morning ready to face tough challenges and enjoy their successes,” says Paul.
Melissa agrees that the team is crucial. “We hire executive level people who buy into our way of thinking,” she says. “They are very experienced in their individual field, so I let them go away and run with it. At the speed we are growing you can’t expect to know every detail. I’ve never been in such a fast-moving business before, but we keep getting stronger.”
5 key steps
If you think you’ve got an offering that is likely to be in demand through the current crisis, here are five steps to scaling up your business so that you can take advantage of the opportunity.
- Identify customer needs and new market opportunities
- Make the most of new technology
- Fill in knowledge gaps by training or hiring
- Build a culture focused on growth
- Always keep an eye on cashflow
If you’d like to find out more about scaling up, speak to your St. James’s Place Partner.
The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.