Productivity

From one to one hundred – how to scale your headcount in a year

Reading time:  3 Minutes

Every startup dreams of overnight success. In an economic environment where we’re more connected than ever before, this dream is increasingly achievable.
We’re not saying that quick growth is easy, but we can share some strategy lessons we’ve learnt from those business masters who’ve made it work.

Scaling vs growth

Scaling and growth aren’t quite the same thing. Broadly speaking, growth means expanding revenue and resources at a steady, matching pace. Scaling means adding revenue fast and adapting your business to meet demands with a smaller growth in resources. As your margins grow, your business evolves, normally at a good speed.
The consensus among many business experts is that there are a few basic ingredients a company must have in place to scale up. These are:

  • a clear, practical strategy
  • a hiring plan to bring in the right people
  • strong cash reserves.

The strategy

The strategy for scaling differs from a traditional business model but has fast become the new norm for forward-thinking startups. Small, innovative companies are able to use disruptive online and app-based technology to change how industries do business.
Focusing on technical solutions to pre-existing pain points in your industry will allow you to scale quickly as you have a ready-made audience and fewer blockers to growth. Tech startups need little in the way of overheads – Uber being an obvious example that is entirely app-based. Other disruptors include property app Compass and travel site Airbnb.

The hiring plan

Another tip to learn from these startup superstars is to work with a network of freelancers. This allows you to scale your resources without making direct hires, and is far more financially accessible.
Flexible working is a sure-fire way to attract staff – our survey data shows 55% of respondents think flexible work schedules improve their commutes and 46% say it lets them see more of their family. And it’s not just a ‘nice to have’. Around 56% of people have said that remote working helps their concentration, while 53% stated that it improves their productivity. Flexible staffing strategies also mean you can respond quickly to changing demand without any big costs.
Where will your new employees work? Solutions like those we supply at Regus enable you to rent office space on short term leases. This means that you can scale your headcount up at short notice and with no extra cost. Around 73% of people we spoke to said that this is the main benefit of flexible and co-working spaces.

The cash

The final element of scaling up may be the biggest challenge. Venture capital can be the jackpot for some (rare) startups with new products, but your business will need to be able to scale tenfold in around three years. Angel investors are another way in – whether they be the ‘doctors and dentists’ groups looking to invest together or solo ‘angels’ – and offer 15% more investments than VCs. Private bank loans are also an option, but be aware that banks are very unlikely to fund small businesses directly.

Despite queries around success rates – 60% of those fundraising on Crowdcube do not succeed – crowdfunding sites are also a popular choice for small businesses looking to scale fast. Whether it’s biotech startups or online estate agencies, sites like InvestingZone and Kickstarter allow entrepreneurs to connect directly with the public for funding (and some word-of-mouth promotion too). Your best bet may be specialist sites – such as MoolaHoop for female-led business ventures or Trillion Fund for renewable energy firms.

With your strategy, hiring plan and cash in place you’re good to go. But you’ll need to be prepared for the changes that come with scaling. Founders and CEOs should get ready to hand over some responsibilities and, with them, trust. Businesses should expect the unexpected – particularly in the shape of unforeseen costs. Finally, before you start scaling, make sure you get your strategy right. In the words of Ryan Smith, Qualtrics founder and CEO, “Nail it, then scale it.”