Transitioning from Micro to SME
Starting up a business requires a lot of determination and a host of other skills. As an entrepreneurial person, at the startup stages, you’ll be busy all of the time: roadmapping, marketing, planning, meeting, sorting out accounts and many other things. This article discusses the crucial time of transitioning from a startup or micro business to an SME. Your revenue growth should be an indication of when it’s the right time to take this important step. This may happen organically, but as a business owner you can influence the decision as to whether to grow your business or keep it at its current steady rate.
#1 Don’t go it alone
Transitioning from micro to a small business or enterprise is a tricky balancing act; you need the income to drive you forward but not too quickly that you can’t expand staff at the same time. Outsourcing accountants, writers and even PAs can help bridge the gap as your business transitions from one phase to another: freeing you and your partner/team to complete regular tasks involved in your company.
#2 Team playing
You may need to consider recruiting someone for a new position within the team. This can be anything from a business development manager to a fully fledged marketer. Hiring a new member of the team will inevitably encourage and motivate the rest of you; since their job will likely alleviate you from some duties and help you to achieve your goals.
At the startup stage and throughout, it’s important to set achievable goals and regularly review attainment and progression. Stay focused on your objectives, rather than growth: growth is a by-product of a successful business. Progressing from micro to SME shouldn’t change your company attitudes and values: these make you unique. Holding onto these an incorporating them as you develop your business will help you to continue as you wish to.
#4 Don’t sell yourself short
Often, at the very beginning all you want is the chance to build a portfolio and gain some regular clients. Referrals and endorsements are what it’s all about, right? It’s tempting to succumb to working for smaller fees in order to gain reputation. When you initiate the transformation which will expand your business, you must be sure to evaluate clients and their worth. Nobody can sustain working for free. You need to be consistent and not compromise on your quality of service. Weigh up your strengths and weaknesses, what you enjoy doing and ultimately what gives you the best return; then prioritise these core areas of strength to drive your business forward.
#5 Move with the times
Finally, never cease to innovate. You’re the boss, right? That’s one of the great things about being a small business owner: you can have an idea, and immediately put it into action. If things aren’t going how you’d hoped or there’s an area that seems more lucrative: try something new.
Now is a really productive time for small businesses and startups in the UK; with a reported 2.9 million businesses planning to expand over the next 3 months. With a focused roadmap, strong team and innovative approach, you will be guiding your startup to SME status and progressing with the times.
- In 2013, there were 4.9 million businesses in the UK.
- 526,446 new businesses were registered with Companies House, beating the 484,224 businesses recorded in 2012, and 440,600 in 2011.
- Over 99% of businesses are Small or Medium Sized businesses – employing 0-249 people
- 4.7 million or 95% of businesses were micro-businesses – employing 0-9 people. Microbusinesses accounted for 32% of employment and 18% of turnover.
- In London, there were 1,266 businesses per 10,000 resident adults.
- In the North East there were 633 per 10,000 resident adults.
- The service industries accounted for 72% of businesses, 78% of employment and 68% of turnover.
- The manufacturing sector accounted for 6% of businesses, 11% of employment and 17% of turnover.
- 18% of SMEs are female led, and 22% of FTSE100 board members are female.
Source: House of Commons Library, Economy Policy & Business Statistics PDF, July 2014 (www.parliament.uk/briefing-papers/sn06152.pdf)