One of the biggest issues startups face is how to go from launch to a bigger, well-functioning business: also known as ‘scaling up’.

Difficulties tend to centre on hiring, funding and marketing but can go way beyond these concerns.

Tips from legal, finance, marketing, insurance and HR experts on how to scale up your startup © iStock/Mlenny

A panel of experts came together last week to discuss the expansion challenges faced by startups at a London Technology Week seminar hosted by Tech City News.

Representatives from the legal, finance, marketing, insurance and HR sector offered their various perspectives on how to scale up startups and provided a wide range of advice. Here are some of their tips...

Divide up shared capital before beginning to finance

Many startups look for financing before they’ve divided up their capital amongst founders and employees.

Adrian Rainey, partner at Taylor Wessing explains: “When shared capital hasn’t been sorted it can create tax risks for the founding group.”

Secure intellectual property at the start

Check that your company is not infringing on any other intellectual property and make sure it is secured within your own company.

“Do basic searches on things like trademarks. You will discover very quickly if you’ve found someone else’s IP,” says Ben Rose, insurance director at Digital Risks. “Ensure IP is invested in your business.”

Consider the future of the company in all plans and decisions

While things typically move rather quickly at the early stages of development, it is important to consider how decisions will impact the company’s function in the future.

“Make sure the basics are right. Think about what you’ll need two years down the line that you should have done at the start,” advises Laurence Parry, tax partner at Kreston Reeves.

Hire people who will help take the company forward

While looking for new employees, it is important to hire people who will fit in and care about the company.

“It is so easy to just hire someone with the skills you need right now, but think about if they will take you where you want. There is research showing distinct diversity between people who are transactionally motivated and those emotionally in it who want the company to succeed,” says Dr. Jill Miller, research adviser at the Chartered Institute of Personnel and Development.

Establish the brand

Make sure the brand represents the company in an accurate manner and reflects its goals.

“You’ve got to be out there talking about what the company does and why all the time. Really establish your brand. Not just the visual identity, but also the purpose,” says Mary Ellen Dugan, CMO at WP Engine.

“It’s important to get that vision of who are we, what we stand for and how we echo what we put out to clients on the internal side of things. We assume that everyone gets what’s in our heads, but we need to be a little more formal and clear with our communication in order to get the right message out,” says Miller.

Keep an open mind when hiring 

Experience is not the only thing an employer should be looking for.

“30 percent of the WP Engine workforce does not have a university degree. There’s a whole range of technology skills that you need, not just one cookie cutter model,” says Dugan.

She continues: “I had the opportunity to hire people that wanted to get into tech but didn’t have the skills yet. You do need top notch expertise as well, but there’s still a wide range. Every company is a technology company now. Be open to different skillsets.”

Find investors that match the company's interests and plans

A clash between company interests and investor interests will create problems.

“It is absolutely as much about you choosing the investor as the investor choosing you,” says Rainey.

“The founding partners and group need to be clear on why they want this investment to start with. Try to think of who matches you as an investor. For example, we didn’t want any jobs to be cut after six months, so we picked someone we could identify with,” says Miller.

Use an integrated marketing strategy

Integrated marketing strategies can work for different types of businesses from startups to large corporations. The use of different platforms including social media and advertising will be crucial to the success of a business.

“A company can’t just do one lighting fast thing, as much as we want that to work. It’s been said that a person needs to be ‘touched’ seven times in order to gain real recognition. Companies need to use this multi-faceted approach and it must be ongoing,” advises Dugan.

Keep the team motivated through clear communication

Miller explains: “As a company gets bigger it becomes more difficult to speak to an owner. It can make employees feel like they don’t matter when they don’t see their bosses on a daily basis. We can’t rely on conversations in the car park or at the water cooler anymore. It can be chaotic when the vision is no longer clear.”

She continues: “The most energising and inspiring thing is when employee and employer understand each other.”

Find a balance between the use of employees and outsourcing

Outsourcing does not need to hinder a company’s internal workforce.

“You don’t want to stack employees if you can outsource efficiently. There needs to be a balance between the core team and the excellence and commitment of the business,” says Rainey.

Understand your employees

Keeping employees engaged and happy is vital to the success of the business.

“It makes the point that we need to know what motivates us and then attract even more people like that into our business. Simple questions like what makes you want to get out of bed in the morning to what you look for in a workplace? Inspire and motivate people beyond the initial excitement. What keeps people engaged once excitement is gone?” says Miller.

Use your network to your advantage

It is important to think about networking on as large a scale as possible.

“Think about your network. Surround yourself with as much quality as you can. It will almost certainly open doors to investors along the way. How you bring in people from your network is so important. People/alumni are usually very generous with their time when you’re first starting. If you’re smart about it you can access not just your advisory group but also a fantastic circle of advisors around you,” says Rainey.

Be aware that the skills needed at the founding of a startup will change

Not every employee and skill will be needed as the startup grows.

“The skills you need at the start of a startup are not necessarily the skills you’ll need in two years. This is a difficult conversation to have and most businesses do need to have it. A lot of businesses delay that difficult conversation way too long,” says Parry.

Treat international scaling with care

Consider the differences that will affect the business in other countries.

“Be careful with tax. If you don’t own 100 percent of subsidies you have to think carefully about that because a buyer will want all 100 percent. Find a way to deliver all of it,” says Rainey.

“How you hold data and how you secure it will be different in other countries. It can be quite easy to be bullied into accepting contractual agreements with other countries as a startup. Make sure you are being careful and looking into obligations,” says Rose.

Make the most of UK tax breaks

Tax breaks in the UK are some of the best internationally and can benefit most people involved with a business.

“The tax breaks in the UK are unbelievable. There are great share options, tax breaks for the investor and also tax efficiency around share plans for employees,” says Rainey. “There is a whole package of tax breaks that are UK specific and is not represented in any other tech industry in other countries. The US looks at this with huge admiration,” he explains.

Keep your digital image up-to-date

The digital image needs to reflect the business as a whole since this will be the first impression for many people.

“The digital arena is the most cost effective. The beauty of digital is that size doesn’t matter, whether it is two men in a garage or 100 people. Startups need to put confidence in their digital presence. It will showcase that your customers come first. Make sure digital presence is top notch and best in class,” says Dugan.

“Constantly push out the message, what you’re doing and how you present yourself. Showcase customers and showcase confidence. Show why you’re a company people should pay attention to,” she continues.

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