Scotland is an amazing place to start a company – with support on hand from Business Gateway, Scottish Enterprise, trade bodies, and professional advisors like accountants and lawyers, entrepreneurs are spoiled for choice when it comes to seeking help.
The next stage can be more complicated though; when it comes to scaling-up a business, there are lots of questions to answer about hiring staff, taking on funding and expanding into overseas markets.
Yet scaling up a business is an important part of many companies’ lifecycles and is at the heart of the Scottish Government’s “Can Do” agenda.
Tommy Cook, founder and chief executive of Linlithgow-based telecommunication testing equipment maker Calnex, highlighted the need for entrepreneurs to have the ambition to move their companies onto the next level.
“People ask ‘What makes you think you can do it in Scotland?’ but I turn it round and ask ‘What makes you think you can’t do it in Scotland?’ – there’s no glass ceiling to stop you,” he said.
Finding the right people to work in the company is one of the biggest challenges that Cook has encountered, especially when it comes to sales.
“Technology companies tend to be full of technologists, who naturally worry about the technology – but what they may not worry enough about is sales,” he said.
“How are you doing to find your customers?
“I don’t believe any product sells itself, nothing is that wonderful; even the iPhone didn’t become a must-have product by chance or by technology alone – it was through a very sophisticated sales and marketing campaign.”
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Cook added: “A really good sales person is worth every penny and more – but bad ones can just about sink you as a company.
“Getting the right people in and figuring out how you’ll manage them remotely is quite a challenge.”
Gareth Magee, a partner at accountancy firm Scott-Moncrieff, agreed that getting the right staff in place is an important step.
“It always comes back to the people – a lot of early-stage high-growth companies make the mistake of not putting enough focus on getting the right people for the business,” he said.
“A lot of people have invented something clever – but they also think they can be the sales person and the finance person and the admin person – and no-one can do all that stuff.
“Look at the skills the business will need – as business angel Barry Sealey put it, it’s more important the business is run well than run by you.”
Looking for the right sources of finance to fuel growth is another important consideration.
Magee said: “In my experience, entrepreneurs often forget that growth requires funding.
“It’s like anything else in life – if you want a bigger house then most of us will have to take out a bigger mortgage – it’s a fact of life.
“Growing or moving up the ladder requires money to go in before it will start generating money.
“You need to fuel the rocket before it will take off.
“If you structure your growth to generate cash then that can be a source of funding.”
Magee added: “It’s important to get some common-sense financial or legal advice so that you look at the options instead of automatically getting drawn down one route or another.
“You need to get the fundamentals right before you start speaking to people like business angels.”
Once an entrepreneur is ready to look at external funding then there are many options available to them.
One of the sources of information about investors is Young Company Finance Scotland, which has been tracking funding deals since 1998.
As well as compiling details about the investors who have been involved in deals, it also lists young companies that seek funding.
• This article was produced in partnership with Young Company Finance