As a firm we have been heavily involved with The Eastern Enterprise Hub, Cambridge University Entrepreneurs & Innovation Martlesham over many years and, as a result, worked closely with a number of start-ups who were pushing big growth plans. Aside from funding, their top five areas of concern always are:
- Getting systems and procedures in place;
- Finding and retaining the right people;
- Utilising and maximising the tax breaks on offer;
- Competition; and
- The speed of technology change.
It is important to think like a big company from day one. What systems and controls are best practice? What’s best to get in place now which will stand the test of time for the next few years? These questions are important to consider, as good disciplines early on ensure the right mind set. Also, any due diligence process on a sale of the business will look at this and the easier the potential integration, the more chance everything has of completing.
Getting the right people in the right role is crucial for growth. Start-up’s cannot afford to be distracted by managing poor staff. This is a drain on resources and will also impact on team morale. If you find that staff attrition is high, you must ensure staff are rewarded both financially and non-financially to ensure a positive workplace.
The government offer incentives in the form of Research and Development tax credits, Innovate expenditure grants, National Insurance rebates etc. Your advisor should be ensuring all options are considered to not just maximise savings now, but in the future too. Planning is vitally important here to ensure decisions made at the start do not impact adversely on sale/floatation etc.
The Ensors Corporate Finance team, led by David Scrivener, are used to sourcing funding for scale ups. “It’s a competitive space but knowing the right angels and venture capitalists is essential. We are currently working on a multimillion pound scale up in the telco sector with a venture capital trust funded organisation dealing with financial and tax aspects for the management team. It’s transformational for the company involved and will unlock the potential in their business.”
It is also important to keep an eye on what your competitors are up to. Not to worry necessarily, but to see if they have considered something you have not, or perhaps when they are planning to go to market. In addition, the technology market moves at such speed. Products sometimes only have short life cycles so profits and cash must be maximised to harvest opportunities.
In summary getting the basics done well from the outset will ensure the greater chance your start-up has for success.