If you want to grow, above all make it easy
Businesses are much easier to start than to grow. Maybe that’s something we learn only after we take the plunge. But the complexities of scale are real and can be hard to overcome. In the UK, nine out of ten start-ups survive the first year. Five years on, however, only four out of ten will still be trading.
Expansion difficulties are an important reason why. DocuSign recently commissioned research into SMB growth, asking 1,000 small business owners about their attitudes towards expansion. The research found that only 22% of small to medium sized companies (SMBs) have plans to expand outside the UK. As the nation starts to rethink its trading relationship with the rest of the world, this proportion is worryingly low.
It’s possible the lack of trading intent could be down to Brexit, with some companies waiting to see how our new relationship with Europe takes shape before they look further afield. What’s certain though, is that Brexit is only part of the story.
SMBs also told us about the biggest barriers to expansion. The most common were financing, lack of personal experience and red tape. There are many different layers to these broad themes. Experience could be about access to the right knowledge, such as customer or market understanding. Or it could mean a lack of expertise, in data, customer experience or regulation.
For some start-ups a lack of experience can be compounded when the founders try to grow headcount. Replicating the effort and value provided by those at the top can be tricky in a competitive jobs market. And when good people leave it’s not always easy to replace them.
Asked what skills they most wish they had when they started their business, finance (21.5%) and digital (19%) were ranked most highly. As a busy business owner, learning fundamental skills such as these, or recruiting them, would inevitably slow the progress of expansion.
Finance is a complex barrier. Many companies take a backward step post-launch and investment is required to find new momentum. But simply raising a war chest for expansion isn’t enough. It’s knowing how best to use that war chest that counts. And this decision alone can often pull a business in different directions, causing missed opportunities and stalled momentum.
Some businesses set out to stay small. In the UK, SMbs account for more than 99% of the 5.7 million population of private companies. Freelancers and micro businesses make up 35% of that number – and the proportion is growing. In the last ten years, the number of people choosing to become freelancers has increased by 43%. Part of this is about lifestyle. The societal trend is towards better work life balance and freelancing enables flexibility and greater autonomy.
How to scale up digital
It’s tough to scale a business. But a common denominator among those making it happen is digitisation. Digital tools make it much easier for businesses to mimic the operations of much larger firms, if not outperform them in terms of agility of service. That counts for micro start-ups and freelancers as much as it does for larger SMBs because in many cases businesses are competing for the same pool of customers.
That means customer demand for a joined up digital experience is the norm. It means speed of service and personalisation are prerequisites. And it means smooth and efficient processes are a minimum requirement, not just for growth but for survival.
Here at DocuSign we don’t make any secret of the fact that our aim is to make business growth easier, especially when it comes to expansion overseas. Documents have been DocuSigned in more than 180 countries and in 43 localised languages, automating workflows and collecting payments and signatures in one step, regardless of the local currency.
SMBs like documentary maker Finish Line Features are testimony to the digital advantage of eSignature. Docusign enables Finish Line Features to sign investor agreements 75% faster. Equally, project management software provider to the healthcare industry, Kasa Solutions, cut the time for on-boarding new customers by 50%.
It may be that today, appetite for international expansion is low. But having digitised processes like eSignature in place will help today’s crop of small businesses to embrace the many growth opportunities that come their way, and help them better overcome the barriers. The last thing any ambitious business wants to hear from a customer is that they are too difficult to do business with.
Download your copy of the new SMB Research: Start of Something, Lessons in Scale for free.