In a challenging economic period it’s understandable to be cautious and worry about whether it is the right time to invest or expand, and ultimately scale-up your business.
We need to look at what the barriers are to Scottish entrepreneurs taking their business to the next level. Skills and leadership are crucial, as is funding.
The number one challenge is acquiring and retaining the right people
At our Barclays Scale-up event last week in Glasgow we asked the question – What are the live challenges businesses in Scotland are facing while embarking on that all-important series A round funding? It gave us the opportunity to hear first-hand from Scotland’s businesses as we got under the skin of the challenges of scaling up a business.
Undoubtedly the number one challenge is acquiring and retaining the right people. The team is the foundation of every company, and can directly influence the scale-up process. Start-ups also face difficulty deciding exactly where to deploy funds. Some may put more prominence on traction numbers, market sentiments or the team, while others may look at global expansion. Prioritising is a major dilemma at this level and as a result too many businesses are unable to demonstrate a scalable, manageable and sustainable business model and effectively secure investors for funding.
That leads onto investor selection; it is vital that start-ups choose the right investor. Such is their passion for their business and determination to make it a success, many simply aim to secure funding from any source possible as opposed to being selective. The goal should be to secure the most compatible investor for your products and services. Someone who believes in the company’s vision and accepts what their level of involvement will be from the outset.
So what was our advice to the businesses in attendance? Now, more than ever, companies need to provide good quality information to enable lenders to assess funding requests. Profit, loss and balance sheets are, of course, important but a lender’s key focus will be on the business’ cashflow and risk profile.
In Scotland as a whole, the focus is now on how to help our businesses achieve sustainable scale and reach their full potential. The objective is to build a community of entrepreneurs leading scalable businesses across Scotland, with support provided to those with ambition and potential for growth.
• Juliet Rogan is head of high growth and entrepreneurs at Barclays