Is the time right to "Scale-up" your business?
“Scale-up” is now recognised as a key stage in the life cycle of business growth with scale-up businesses generally defined as those who achieve growth of at least 20% per annum over 3 years having started the period with at least 10 employees.
This stage follows the start-up and early-stage phases of growth where the failure rate has always been particularly high - especially for those businesses seeking rapid growth:
The World Bank has estimated that out of every 100 start-ups around 70 fail at an early stage and, of the 30 that survive, only about 10% will grow significantly. Policy-makers are very interested in these businesses because their ability to create jobs and grow tax revenue outstrips businesses which focus on providing a lifestyle for their owners by a very substantial margin.
For the business owner, the scale-up phase is a time of great excitement but also enormous change and challenge. The starting point has to be a clear understanding of the business model and which elements are scaleable. Delivering the growth will then require substantial additional resource including people and finance.
Without a carefully thought through business scale-up plan the risk of business failure will become much higher as will the stresses and strains on the owners.
It is during the scale-up phase that the ability of Mitchell Charlesworth and MC Vanguard to provide a full range of support to owners really comes into its own. The best way to illustrate this is through a case study.
Case Study - Bodyline Weight Loss Clinics
Bodyline has been a Mitchell Charlesworth client from a very early stage. The business operates a network of clinics specialising in doctor and nurse led non-surgical medical weight loss solutions. The business was originally based on the vision and dynamic energy of its founder Sally Ann Turner. The unique service provided by the clinics provided a business model with clear scale-up potential.
Over the last 2 years, Sally has:
- Overhauled the clinical and management processes within the business so that Bodyline is now recognised as an exemplar business so far as compliance with CQC standards is concerned
- Secured £1.5m in venture capital funding to support the buy out of a former business partner and growth in the clinic network
- Appointed an experienced Non Executive Chairman
- Overhauled financial management processes
- Opened 2 new clinics in Stoke and St Helens to bring the network to eight.
Sally deserves her success which reflects both commitment to the business and her sustained energy in driving growth. As her accountants and corporate finance advisors we have been delighted to support Sally in some of the key steps and we look forward to continuing to work with her on scaling up to a larger network of clinics.
Sally commented recently: “Mitchell Charlesworth have been instrumental in making this growth opportunity happen for Bodyline and the team, in terms of selecting the right funding model and funder, the total team support of leading us though an MBO process, to where we are today on a dramatic growth path over the next 3 years, their constant support has been invaluable and we continue to work closely with them to maximise business value.”
The full range of services we can provide to Scale-up businesses include:
- Strategic planning and management support to refine the business model so that it provides true scale-up potential. This support is provided by partners and senior staff whose skills have been developed through working in major consulting practices and MBA studies
- “Hands-on” support to develop business plans which identify the resources needed to scale up
- Help to ensure financial systems and management reporting evolve as needed to ensure the owners can be in control through periods of rapid change
- Fund raising from banks, debt funds and venture capital as required to support rapid growth
- On-going support from senior people using their experience of working alongside fast growing businesses as they navigate through the inevitable challenges that this growth brings
- Maximising business value when the owners are ready to exit.
If you believe your business has the capability to scale-up through rapid growth we would be delighted to talk with you.
Pictured above: Sally Ann Turner (Bodyline Weight Loss Clinics) third from right, after concluding the MBO process.