Everyone who starts a business has at least one thing in common; they want it to scale and they want scaling to happen quickly.
There’s absolutely no shame in that; after all, the main motivation for starting a business is usually to make money, exit/sell or to create something that becomes really well known and popular.
All of these incentives require business growth to make them happen.
But where do you start and how do you go about scaling your business, especially a start-up that to the wider world seems to have appeared out of the blue?
In the case of my company, growth was the main business goal from the get-go.
Since launching in 2013, the business has expanded rapidly. In February 2014, £30 million worth of cars had been bought through the site, which rose to £550 million in less than two years by January 2016. To date, almost £1 billion worth of cars have now been bought through the platform.
How has carwow achieved this level of growth? Well, the truth of the matter is that it hasn’t been easy and a lot of work has gone in to the process. Here are just a few of the now tried and tested ways that carwow has been able to scale so quickly.
From the outset, look for viable finance options that will help to grow your business, whether that’s a bank loan, funds from your own savings or from family members, or investment from angels or venture capital firms.
Although initially bootstrapped, we secured £250,000 worth of angel investment in the very early stages and in February 2014 managed to secure £1.3 million in a seed funding round, led by Balderton Capital.
Later that year, in December 2014, a further £4.6 million was raised in a Series A funding round, again led by Balderton.
In January 2016, a further £12.5 million was raised in a Series B funding round; this time led by Accel (backers of Spotify, Dropbox and many other well-known digital brands).
During the start-ups journey, this funding has been invaluable and has enabled the team to invest heavily in marketing, recruitment and many other areas which have fuelled the website’s growth. Gaining investment can help you to scale your business in other ways aside from the more obvious financial gains.
The angels and investment companies contributing funding can also be used as a sounding board for ideas, issues and other elements of the business that you could do with some expert input or opinion on.
No matter how good your business idea is and what strengths you have as an individual, a business needs a strong team to really propel it forward into the realm of success. Any old employees won’t do, however, and you need to be very selective with your recruitment.
Attract talent by offering a competitive salary; the difference in pay will soon be balanced out when that person you’ve taken on helps to increase your sales.
Take your time over the recruitment process and don’t rush to take someone on, because it’s such an important thing to get right the first time if you don’t want to keep hitting stumbling block after stumbling block.
Having a decent brand profile is key to scaling your business. There are a number of ways to work on your brand awareness, but the most obvious way is to get your marketing right.
Invest in public relations activity, digital marketing and TV advertising if you’re able to. Word of mouth will get you so far, but you’ll need other channels to cover all bases. carwow was able to use some of the investment raised in the later stages to roll out a £6 million TV advertising campaign, voiced by the esteemed actor Michael Gambon.
This had a direct impact on the number of people visiting the website, configuring cars and also buying vehicles.
The team also has a dedicated monthly budget for other marketing activity, like link building/search engine optimisation efforts and online PR; both of which contribute to raising carwow’s profile and subsequently expanding its customer base.
Slow and steady
Mistakes not only hinder a business’ growth, but can also have a detrimental effect on a brand. With this in mind, it’s important to pace yourself and not get too carried away with trying to get everything done all at once.
Having a steady and viable business plan is important and ensuring that it’s achievable in the timescale set is also necessary.
Taking carwow as an example, a segmented launch approach meant that mistakes could be spotted early on and any glitches ironed out.
By launching one car manufacturer on the site first, the team could monitor progress and then launch the second brand once they were satisfied that all was running smoothly.
It may sound counterproductive, but having a slow and steady approach in the early stages of a business launch can lead to faster growth rates later on.
When you’ve invested so much time and effort into your business, criticism can be hard to take; no matter how constructive it may be. However, if that advice is coming from someone who has been in your position and overcome the same obstacles that you might be facing, it’s a good idea to pay attention and try to at least take some of it onboard.
Don’t be too proud to ask for help, because in doing so you could be in a stronger position to scale your business at a much faster rate. Carwow’s decision to raise investment has given access to not just funds, but also a wealth of expertise from the angels and investors who contributed in each round.
James Hind is founder of www.carwow.co.uk.