How craft businesses can find the holy scale

Jeremy Torz gives a few pointers on successfully scaling a craft business in the right way.

Few entrepreneurs if any would actively seek the label of ‘sell-out’.

Understandably, for some the thrill and remuneration of a big sale makes this label easier to bear, and for others it’s the reason they started the business in the first place. In craft industries however, selling out is seen by industry figures and customers alike as anathema – just ask Meantime Brewing Company or Camden Town Brewery, both of which recently sold up to multinationals.

Acquisition might one of the quickest ways to scale a business, but it’s not the only way. For craft businesses, where adherence to principles and ethos is everything, achieving scale is a longer process, a maturation. It requires passion and critically, patience; but is all the more rewarding for it.

Growing a craft business is something we know something about. What started as a hobby transformed into a passion and then a business that’s enjoyed strong and steady growth for the last 15 years. We’ve stuck avidly to the principles of high quality, sustainability, provenance and exceptional customer service but we do understand that these characteristics become vulnerable as we continue to grow.

So from my experience so far, I wanted to share with you a few pointers on successfully finding scale in a craft business in the right way:

Ask what success means to you

In the tech sector, many businesses are launched simply to secure a sale within a few years. The craft sector on the other hand is about the passion and drive to continually improve quality and experience. Sticking to this means putting your ambitions into perspective and assessing exactly what you want your business to achieve.

Consider the operational practicalities

As the name suggests, at Union Hand-Roasted Coffee we hand roast our coffee and you might imagine that at some point in the growth process this would no longer be viable. But provided we are growing sustainably, there’s no reason we can’t continue to do this; it just means that we have to think ahead and work out how to scale production in a sustainable way.

Get the right team in place

Having the right infrastructure for growth is so important and this starts with having superstar team members throughout your organisation. Because they are a) talented and b) completely engaged with your business, when the opportunity to grow arises, you (and they) will be ready.

Get the team on board with growth

Similarly, it’s crucial that you communicate the importance of, and desire for growth, with your team. They need to be absolutely clear of the direction the business is going. Weekly meetings, internal newsletters, and team events are good ways of achieving this.

Keep supply chains transparent while increasing efficiency

Provenance and craft businesses go hand in hand. That’s why we developed Union Direct Trade – a sustainable way of sourcing coffee that sees us paying at least 25 per cent over the Fairtrade minimum, and working extremely closely with farmers and co-operatives in coffee growing countries. A fair and good deal for them, and one that results in ever higher quality of coffee for our customers. It is because we have these relationships in place, that we’re ready and prepared if a hefty piece of new business came in.

Learn to say ‘no’

Sometimes turning down new business, even if it’s considerable, is the right thing to do if they do not buy into your passion and ethos. While turning down big orders can be difficult, if your business is in good shape, you can be sure that the right opportunities are just around the corner allowing for the right kind of growth that doesn’t entail compromise.

Think big, but continue to think small

As you grow, there’s a good chance you’ll start doing business with larger companies who want to tap into your craft credentials. As you do this, you’ll also need to ensure that you’re continuing to engage with your existing customers and followers. Smaller customers want to know you won’t forget about them, while larger customers want to know you can handle their needs. This means carefully considering how you are perceived by each group and ensuring you are communicating with both sides openly and effectively.

Do look a gift horse in the mouth

In the age of crowdfunding and angel investors, attracting funding has never been easier. But approach with caution. If you choose the wrong option, you may quickly find your business going down an undesirable path.

Crowdfunding is one way to retain control, but can be hard work and with no guarantee of success. If you are tempted by investment from an angel, or from private equity, I’d urge you to carefully consider their motivation and to interrogate how closely their ethos aligns with your own.

Grow on your own terms

Simple really, but this is the golden rule. Weigh up decisions carefully, and do everything you can to keep your company true to its values. That doesn’t mean fearing change, but it does mean changing for the better.

There’s no such thing as the point of no return

Confession time. Long ago our first coffee company was bought out by a small coffee shop chain which was subsequently bought out by a now well-known global coffee company. After this happened, the lure of growing a business on our own terms was an infinitely more exciting prospect. So we left, launched the new company and never looked back. Union is in rude health with growing revenues, expanding premises and an ever larger team. So even if you do sell your company, it’s just the end of one chapter, and the beginning of the next.

Jeremy Torz is co-founder of Union Hand-Roasted Coffee.

Further reading on business growth and scale

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