Whatever your business, whether it’s commercial or a charity or not-for-profit, if you grow significantly there will be major implications on how you fund the growth and manage the cash.
VIstage Speaker, Jo Haigh, puts it like this: “You can trade profitably for ages, but you can only ever run out of cash once.”
James Nicholson-Smith, Director, FD Centre also warns: “Unless you’re really determined you need the funding and have a really good reason for it, this whole funding bit can be a massive distraction to the business. Go into it with your eyes wide open, knowing that it’s going to take a big, big chunk of your time.”
The Scale-Up Institute figures quoted in a recent Vistage whitepaper report show that fewer than 4% of all UK start-ups have 10 or more employees 10 years into their lives, this demonstrates that the majority of start-ups fail to scale – Why is this?
Guy Rigby of Vistage partner Smith & Williamson sees lots of businesses that start with a visionary flourish, only to stall after failing to add more customers because they haven’t innovated or got their marketing right. They lose their way, unable to see how to get to the next stage and become one of the ‘living dead’. These businesses are going nowhere, having lost their vision and reason for existing.
Scale-up is an entirely different business environment, it’s more than just entering an accelerated growth phase. The difference with scale-ups is that the game changes so fast and often simultaneously in all these areas, when growth accelerates. And as we have seen, the price of failure is larger in a scale-up.
As a business professor, students often ask me where they should take their careers in order to have the most impact. They are expecting a straightforward answer: that they should work in finance in a large resource-extraction company, say, or in the advocacy department of a multinational non-profit organization. Instead, I am quick to tell them, “Wrong question: try again.” The key question is one that only they can answer for themselves: “What were you meant to do with your life?”
This deeper exploration leads to the pursuit of a calling or a vocation, which is nothing more or less than your purpose in the world. We all have a goal or purpose to what we do. Where do you devote your energy? How much time do you spend with your family, or in the woods, or pursuing wealth?
It never ceases to surprise us when CEOs confide that they don’t have stellar expectations of what marketing can do for their business. “Sure it can make a difference”, they say, “A smart website and some nice newsletters”. All too rarely do we meet a CEO who tells us they expect their marketing to deliver truly transformational, high impact strategic results.
Many have a preconceived, purely tactical view of marketing. “We got last week’s receptionist to make a few changes to the website”. They don’t understand what strategic marketing is and so are unable to set the strategic tone for how they want their business strategy (for those which have one!) to be supported.
And by high impact strategic results – what do we mean? There are a few questions you should be asking of your business.
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