Building a successful company is really tough. Even when you have made it through the start-up phase – product development, market fit, building a team, earning first traction – the process of scaling up remains a challenging road.
Louw Barnardt – Emerging Entrepreneur of the Year
Louw Barnardt CA(SA), recently named the Emerging Entrepreneur of the Year at the Sanlam/Business Partners Entrepreneur of the Year® Awards, shared his five top lessons learnt from fast-growing clients and from their own journey of scaling up Outsourced CFO to twenty-seven full-time professionals.
“There are many stumbling blocks that hinder exponential growth at the scale up phase. Successful start-up founders do not always have the right skill set and experience to build a business from five to fifty people or from twenty to two hundred.”
Louw and his team have taken the concept of an ‘Outsourced CFO’ – a go-to finance person for emerging companies – and built a very exciting business from it.
“There are hundreds of lessons one learns on the journey of building a scale-up company. These five stand out among all of the biggest lessons learnt.”
1. Build your people
Doing business is all about people. In
start-up phase, founders are able to manage almost everything. From the social
media post to the invoicing to the recruitment – it all falls on you. One
founder can manage this for a short while and a founder team for a bit longer,
but somewhere between five and twenty people this changes. The founders can no
longer make every call, have every meeting, answer every client query.
It’s critical to build a solid leadership
team and then to equip them with enough autonomy and authority to run with the
various portfolio’s within the company. Put a head of HR, head of Sales, head
of client engagements, head of operation and head of finance in place as soon
as you can and keep investing in them – it’s the only way to scale out of
2. Be smart about cash flow
The finance function sits at the heart of
every business. If the numbers don’t add up, everything comes to nothing quite
fast. Founders need to make sure that they have a firm eye fixed on financials.
New cloud systems enable entrepreneurs to have access to every detail of
revenue, profitability, debtors and cash flow in real time.
That’s right – exact live financial
information at your fingertips for decision-making. Foreseeing cash crunches
ahead of time and actively being able to navigate to avoid them makes all the
difference in the scale-up process. Growth eats cash, so be sure to manage
yours on the way up.
3. Automate and streamline
A start-up can afford to do what needs to
be done in the moment. Scale-ups cannot. Automation of company processes is key
to enable scale in various company functions.
Automate your sales process with a tool
like Sales Force or HubSpot. Automate your marketing with a tool like
Hootsuite. Automate your finance with a tool like Xero. Automate your company
culture input with a tool like Hi5. Putting a good system in place and
investing in the understanding and utilization of all of its functions is a
prerequisite for high growth.
4. Strategy is key
As execution becomes a bigger and bigger
part of your company, the strategy that directs that execution plays an ever-increasing
role. The most successful management teams set and stick to good habits around
strategy: Annual breakaways to direct long term strategy. Quarterly strategy
days to cement key strategic priorities for the next 90 days and the likes.
It may seem counterintuitive to have your
full management team out of action for so many full days of work, but putting
the right strategy in place to execute is the real deep work required to
5. Build a world-class brand
The value of owning a top brand and of
being top of mind with all your stakeholders cannot be overstated. A stronger
brand lifts the market’s perceived value of your offering. Continuously
starting conversations and finding ways of reminding your networks and target
market of who you are and what amazing things you are doing opens up
ever-bigger opportunities that play a huge part in creating scale for our top
“Building a company is really hard work. But if you do it smartly, the juice is worth the squeeze many times over. Make these five lessons your own to hack the scale-up journey as you build the business of your dreams.”