Key considerations for business success

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    For most business owners and management teams, maintaining or even increasing organisational growth in the early stages is the biggest challenge. Winning new customers or contracts and delivering the product or service within a tight cash runway requires skill and hard work. Richard Brighty, Investment Manager at Maven, discusses four key components that every business should consider to ensure long-term success and revenue growth.

    Published: Aug 30, 2024

    Keeping a business competitive and growing market share is a constant challenge, whether you are a startup or an established brand. Yet, earlier stage businesses face numerous operational and strategic problems which have less of an effect on their larger counterparts. Operational issues often arise due to a lack of strategic foresight, as the day-to-day demands of running the business stretch resources thin.

    Keeping a business competitive and growing market share is a constant challenge, whether you are a startup or an established brand. Yet, earlier stage businesses face numerous operational and strategic problems which have less of an effect on their larger counterparts. Operational issues often arise due to a lack of strategic foresight, as the day-to-day demands of running the business stretch resources thin.

    Unlike established companies with dedicated teams for various functions, those at the helm of a startup often find themselves juggling multiple roles, which can lead to inefficiencies and missed opportunities. This balancing act can leave little time for long-term planning, making it difficult to navigate the complexities of growth.

    Here are four areas essential for building a sustainable growth platform.


    1. Business Planning

     

    Effective business planning is critical and should be accessible to as many groups as possible within the organisation. A detailed business plan shared with all executives and senior members of the management team ensures that the entire team understands and supports the company's direction and goals. Without a clear plan, staff may become unproductive, disengaged, or demotivated, unable to see how their roles contribute to the company's overall objectives. As the saying goes, "If you fail to plan, you are planning to fail."

    The COVID-19 pandemic underscored the importance of robust business planning. Global disruptions, such as the temporary closure of the Suez Canal, the Ukraine war, and ongoing conflicts in the Middle East, have severely affected global supply chains. These events highlight the need for robust business plans which include financial disaster contingencies, such as a working capital line of credit, to mitigate unforeseen disruptions.


    2. Establishing a Credit Safety Net

     

    A credit safety net is crucial for any business, as unforeseen events can significantly impact cash flow and profitability. Once again challenges in global economies exemplified this, affecting staff availability, remote working, supply bottlenecks, and severe price volatility in input costs. Careful cash management is essential, and many businesses may seek external investment from equity providers, angel investors, or debt funding depending on their stage of growth.

    Beyond traditional high street banks, various funding options are available. Debt funds like MEIF Maven Debt Finance offer flexibility, allowing businesses to draw down funds as needed and repay early without penalty if the outlook improves. This flexibility helps businesses manage growth more effectively.


    3. Valuing Employees

     

    Employees are the lifeblood of any business and will go the extra mile if treated well and communicated with honestly. The accelerated changes in working patterns with more staff now working remotely or in hybrid roles are unlikely to revert. There is an expectation from employees that workplaces will have embraced and adopted a more flexible approach, and this has now become critical to attract and retain talent.

    Employee loyalty and retention extend beyond competitive terms and remuneration. It is also about having a clearly articulated business mission and ensuring key staff understand how their roles fit into the larger picture.


    4. Seeking Professional Support

     

    Most CEOs and Managing Directors recognise they cannot do everything themselves and need two types of teams: internal and external.

    An internal team should have well-organised department heads reporting to the board, ideally including at least one experienced Non-Executive Director (NED) for a balanced and independent perspective. Even small businesses can benefit from a NED, whose insights can be valuable and seen as a positive strategy by lenders.

    The external team should consist of experienced professional advisers, including an accountant and a commercial lawyer. If not part of the internal team, consider a part-time Financial Director to ensure the availability of clear and timely financial information, which is crucial for ongoing management of a business and is expected by external funders and investors.

    By focusing on these four key areasbusiness owners can create a solid foundation for sustainable growth, ensuring the organisation remains agile, resilient, and in a stronger position for long-term success.