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There can be many barriers to scaling up a business, from financing and cash flow to challenges in the economic landscape. Find out how best to overcome these on the path to sustainable growth.
Last updated: 30 Mar 2021 6 min read
“The world around us may have changed over the past few months, but the secret to overcoming barriers to growth, in my view, remains the same – it’s about people,” says Cian Ó Maidín, CEO of NearForm, the company that built Ireland’s Covid-19 contact tracing app. Versions of the app are now also being used in Northern Ireland, Scotland and a number of US states including New York and Pennsylvania.
Headquartered in Tramore, County Waterford, and specialising in globally accelerated solution delivery, NearForm stretches across more than 20 countries.
“Since inception, NearForm has taken a remote-first approach to business growth, especially when it comes to the people we work with,” says Ó Maidín. “From our clients to our team, we have never let borders be a barrier, which has allowed us to be more agile, perceptive and responsive to changing market and business needs.
“At the onset of Covid, as the majority of offices were adapting to being a distributed workforce, our experience in remote working meant we could continue to deliver for our clients. This approach stems from our work in the open-source community, which in its very nature is unbiased and borderless. Open source is part of NearForm’s DNA, and so when it comes to working on high-speed projects for our clients, we take a one-team approach with all those involved. In this way, micromanaging is one barrier to growth you can easily avoid, and it’s important to trust and empower those you work with.”
For many businesses, the commercial landscape has changed dramatically over the last 12 months. While agile businesses such as NearForm were able to respond rapidly – adopting flexible ways of working, developing new products or services, or finding new ways to deliver existing services – other businesses have had to pursue a more defensive strategy in order to protect their growth.
When faced with sudden changes, says Dervla McKenna, a business strategist, mentor and coach and director of On a Platter Deli in Dublin, there is great merit in being able to move quickly from annoyance to acceptance and action.
“Simply asking, ‘What is within my control and what is not?’ will eliminate wasting time on things you can do nothing about,” she says. “Focus on creating a new vision for the future and commit to working on it daily, testing and building in flexibility. In my experience, when a business pivots sufficiently to align its vision and values with its new environment, this provides the best chance of achieving sustainable growth.”
Moving quickly in a crisis requires courage, and sometimes doubting your own ability can get in the way. A recent survey of over 2,500 Taxback.com customers found that 38% suffered, or had suffered in the past, from imposter syndrome – the suspicion that you may have fluked your way to success and therefore won’t be able to repeat it. Acknowledging your fears is the first and hardest step in overcoming them. Over time, experience builds confidence.
When scaling up to meet increased demand, often, the most difficult barrier to overcome is getting access to finance. A robust business plan supported by scaleable infrastructure and processes is essential when seeking investors or borrowing. Adopting the right business structure is also important.
“In my experience, when a business pivots to align its vision and values with its new environment, this provides the best chance of achieving sustainable growth” Dervla McKenna, business mentor and coach
“A business might be expanding into new markets, investing in scaleable systems or taking on additional staff to meet increasing customer demand,” says David O’Connor, a chartered accountant and director at Wexford-based Sheil Kinnear. “All of these things are expensive. If cash is tight or if the business is overtrading, it can run into trouble very quickly, so monitoring and managing cash flow is vital.
“On the investment side, difficulties raising capital and finding investors can be barriers to growth; however, incorporating the business helps as companies are able to raise finance by issuing shares. The company structure is also more attractive to investors.
“The commercial environment that businesses are trading in at the moment is very uncertain due to both coronavirus and Brexit, so it’s important for businesses that have not already incorporated to think about doing so because it gives them limited liability,” adds O’Connor.
“Tax can be another reason to incorporate because the lower corporation tax rate leaves more profit in the company to fund future development.”
To maintain a fully functioning organisation and optimise team performance, it is essential to monitor and control the established processes that underpin daily operations, as feedback from your team and other stakeholders can provide critical information during periods of rapid growth.
“Listening, dispelling fears and keeping people informed on matters that affect them directly is reassuring for employees, customers and suppliers, and helps businesses develop a sustainable growth planning strategy,” says McKenna.
“Pacing is also important. Allowing sufficient time to make changes is more likely to secure buy-in and will in turn encourage a culture of flexibility and openness.”
When it comes to accelerating growth, negotiating a merger or acquisition can be another way to get around barriers and gain market share, particularly in sectors where there is scope for consolidation.
“Before entering into a partnership or taking over an existing company, the first step is to ensure that it is the right strategic move, taking into account your company’s strengths, skills and resources,” says Jim Stafford, founder and managing director of corporate recovery and insolvency specialist Friel Stafford. “You then need to develop a merger or acquisition plan and identify and evaluate targets before negotiating your deal and completing the transaction.
“While a merger or an acquisition can be used to accelerate growth, they can also be used as a defensive mechanism to deal with a downturn in sales, such as is happening with many companies experiencing Covid, and as will happen with some companies going through Brexit. As with any economic crisis, there will be opportunities for companies to grow their business by acquiring businesses via liquidation sale, receivership sale or examinership,” adds Stafford.
Leadership and Management