Are you thinking about expanding your business in Scotland? Do you see yourself being in a position to expand in the near future? Then you will know there are many factors to consider during such a process.
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External factors, such as market trends and the economy will play a factor in your decision making. It is always important to pay attention to these.
But there are also judgements you must make within your own business, and with your own management, when it comes to growth. There are choices you can make to give you and your business the best possible chance of success.
We spoke to experts in the field of economic development to come up with three simple tips for you to remember if you are looking to expand now, or in the near future.
Top 3 tips for expanding your business in Scotland:
1. Seek quality advice
Carry out research, ask for expert advice, and take it. If you are thinking about expanding your business in Scotland it is crucial that you talk to others in the know and listen to what they have to say.
Andrew Dickson, fund manager of Business Loans Scotland, says: “You will know your product inside out, but others may have more knowledge on where best to have it manufactured or how to market it to raise the most awareness.
“People out with your business may be able to point you in the right direction of where to retail or supply your wares.”
Business Gateway is an excellent source of advice and support for those looking to expand a business in Scotland.
Dickson adds: “The gateway offers free advice up and down the country, and there won’t be one too far away from businesses in all parts of Scotland.
“A national body, run by COSLA, it is delivered at local level through local authority partners. It exists to help businesses grow.”
2. Raise enough money and understand your finances
If you are expanding your business in Scotland, you must ensure you have efficient head room to deal with setbacks.
These setbacks could include delays in payment, buildings or premises needing modified, or staffing problems. And they could cost more than you budgeted for.
Dickson explains: “You don’t want to end up in the position where you need to go back to your funders and ask for more money because you didn’t ask for enough the first time round.
“It is always better to ask for more than not enough. We will test business plans at BLS and make sure the forecast can handle a degree of sensitivities, should anything unforeseen happen.”
It is also important to fully understand your finances. Where are your sales coming from? When are you going to receive them? How long will it take your customers to pay?
Dickson says: “You need to manage your own costs. Don’t spend money unless it is essential and will make a positive difference to your business.
“As a growing business, there will always be things you must have and things you would like to have. Until you can comfortably afford the must haves, don’t spend on anything else. Every penny is a prisoner for a growing business.”
3. Have a well written business plan
Invariably, businesses will need to go elsewhere to raise finance. It is very rare that a business can do this by themselves with their own resources.
A well written business plan is essential, therefore, for attracting investors who will allow you to expand your business in Scotland.
“If you are talking to somebody about your business, or writing about it, assume they know nothing,” says Dickson. “You cannot speak to someone and expect them to know all about your business, product or services.
“Explain in plain English what it is you are trying to do. I read a lot of business plans and once I get to the end, I still don’t know what the business does.
“My advice would be to use simple terms and be crystal clear on what your business does and what the benefits of backing it would be. If I don’t understand your business plan straight away, I will get bored. I’m not going to spend my time trying to translate your jargon.
“It must be attention-grabbing from the get-go.”
When should expanding businesses go to Business Loans Scotland?
“First of all, you come to us because you can’t raise the money yourself,” explains Dickson. “Perhaps you have exhausted your friends and family, and the bank is only prepared to give you so much because of your track record or credit history. You’re coming to us because you have a funding gap and you need to fill it.
“We are not a bank, we are a loan fund. Our objective is to help growing businesses create jobs and diversify the economy. Our interest rates are commercial but affordable, currently fixed at 6% of the loan we offer. We want you to succeed.”
For more information, visit the Business Loans Scotland website.
