For the vast majority, starting a company and getting operations up and running usually goes smoothly. But the challenges are never as great as when it’s time for your company to grow. Company expert Kajsa Hedberg, CEO at SISP, offers eight invaluable tips on how to successfully scale up your company.
The provision of skills is a major problem for many companies these days, particularly innovative companies that require in-depth technical expertise.
“It’s difficult to recruit people with the necessary skills, and it’s difficult to match the salaries of data giants such as Google. What you must try to do is work together with other players, such as universities and public sector operators, in order to find some form of shared employment that can attract talent,” says Hedberg.
As an entrepreneur, you must be well prepared and must have carefully considered all steps.
“Many may have tested their product on ‘early adopters’, followed by launching onto the big market. One mistake that some entrepreneurs make is that they think the whole market works the same way as with these initial users. It’s important to meet the needs of more mature customers in terms of, for example, maintenance and logistics. An initial reference order from a large, established company in the domestic market can be a good start, then you may also be able to use the large company for distribution instead trying to do everything yourself,” says Hedberg.
“When the time comes to grow, you will suddenly need to build an organisational structure with clear areas of responsibility and change the board and operational roles. You also don’t want to lose the culture or innovative capacity in the company when you grow, so it’s a balancing act. A mistake that many make is either not building a structure at all, or building a structure that is overly convoluted, and this puts your fundamental company culture at risk,” says Hedberg.
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“When you grow and gain more customers, you need to employ more people – but you also need to have money. I’ve seen companies expand and build premises or employ sales staff and establish themselves in multiple countries before they have enough revenue. As a company, it’s important to seek assistance in finding a venture capitalist who is suitable for the stage the company is currently in,” says Hedberg.
“There are companies that have invested internationally and then suddenly receive a huge request which they are unable to deliver. It’s all about finding balance when scaling up,” says Hedberg.
“You may have some resources and wish to expand from Sweden into an international market. But how can you understand different markets from a distance? It’s not wise to expand into the Chinese market, for instance, before you understand how it functions. There are plenty of companies who have burnt their bridges and made mistakes that way. Try to establish networks with other companies that have been in the same situation so that you can learn from them and exchange experiences, or seek assistance from support players such as Business Sweden or Science Park,” says Hedberg.
“How will your company make sure to raise capital the right way, from the right people, and at the right stage? There have been cases where companies obtained cash but lost control and got an owner very different from what the company needed. It’s important to bring in someone who adds value – it’s not a good idea to bring in someone who has a completely different plan to the owners,” says Hedberg.
“For many companies, it can be challenging to package and present their business in the right way when trying to raise external capital. To bolster your credibility and present a stamp of quality, it can be a good idea to, for instance, carry out some sort of technical verification of the company’s product. Seek advice and support if you need to,” says Hedberg.
Swedish Incubators & Science Parks (SISP) is the Swedish industry association for Sweden's incubators and science parks. SISP has 63 members across Sweden, which together have over 5,000 companies with over 70,000 employees. The focus is on knowledge-based, growth-oriented companies.