Getting a fledgling business off the ground may be one of the biggest leaps you will take as an entrepreneur. But transitioning your growing company from feasibility to ambitious growth also requires a long-term outlook and careful planning.
However well a start-up is doing, moving from a growth mindset to a scale mindset can be daunting, and the list of considerations can seem endless. From stabilising your existing business and customers, to the expansion of your team, and how much investment is required, it can be difficult to know when – or even if – your business is ready to take the next step.
Have a little patience
For Eccie Newton, co-founder of Karma Cans – an office lunch delivery company that now delivers around 1,000 meals per day – patience and consistency proved vital when raising the funds to open more commercial kitchen spaces across Europe.
In 2018, four years after establishing Karma Cans, Eccie and her sister Gini set up Karma Kitchen, a project that draws on the operational experiences of Karma Cans to deliver co-working and commercial dark kitchen spaces to other companies in the food and drink industry. The entrepreneurs now run 22,000sq ft of kitchen space in Hackney and Wood Green in London. In 2020, they secured £252 million via Series A funding from Vengrove Asset Management, only weeks after the original deal fell apart in the midst of the pandemic.
With this investment, the company plans to open 50 sites across Europe over the next five years to provide affordable workspace to more than 5,000 start-ups and SMEs in the food industry.
“I don’t think I’ve ever raised any money in anything less than a year,” says Eccie, who is also a mentor of HSBC’s Roar programme, which supports female entrepreneurs. She believes that success – and growth – in business requires women to become skilled in handling rejection and disappointment, something that can be challenging given how failure is often framed in today’s society.
Eccie’s experience echoes what has been previously reported by many female business leaders. In HSBC’s She’s the Business report, many female entrepreneurs highlighted the challenges of pursuing external funding, focusing on a particular requirement to demonstrate the viability and scalability of their business in order to secure investment.
When it comes to raising capital, female entrepreneurs are securing, on average, 57% of their target investment – almost 5% less than their male counterparts. One of the main challenges being faced by women is a lack of opportunity to make connections with like-minded individuals who may be more likely to invest in other female-led businesses.
“The best leads come from your own network or they come as recommendations from other entrepreneurs you’ve backed,” says Wei Hopeman, Co-founder and Managing Partner of Arbor Ventures. “We like entrepreneurs that come through our own network, or people we’ve worked with in the past or who have worked with other people we know well.”
A shared vision
Throughout seven years in business, Eccie has had a similar experience, and found that raising finance to scale up is ultimately dependent on connecting with investors who share your vision for the type of business you want to grow.
“Meeting the right people and knowing what strategy you’re going to approach when you’re raising money is really important,” she says. “If you’re talking to the right kind of investors, they will be a more receptive audience than someone who doesn’t have the type of money to suit your business or the way your business makes money.”
Finding the right investors to help you achieve your vision is a long game, and one that can be mired with rejection and disappointment. Eccie advises developing a thick skin, maintaining your clarity of vision, and embracing these experiences as learning opportunities that will eventually help lead you where you need to be.
With research showing that only 3% of capital currently goes to female founders, women still face significant challenges in accessing finance and must tap into opportunities to maximise their chances of success. Every female entrepreneur we spoke to as part of our research emphasised the importance of gaining access to like-minded women who are able to offer advice and share the benefits of their wisdom.
Know your numbers
Pitching to potential investors can be one of the most daunting aspects of growing your business, particularly for women who are often trying to sell their vision to all-male panels. It’s vital, therefore, to have a thorough understanding of your figures – and be able to communicate them effectively.
“Expect to be drilled on your numbers a lot,” says Eccie. “No matter how good your pitch is, if you don’t know your numbers then it’s very hard to get someone to feel comfortable with you. Comfort is something that investors really look for. Building that relationship and trust comes from a foundation of solid numbers that are super transparent.”
Given that 34% of female entrepreneurs have experienced challenges in pitches based around questions on their business plan, arming yourself with the knowledge and numbers to gain investors’ confidence is imperative in securing the cash required to scale up.
Value your mistakes
With the large number of hats you wear as an entrepreneur, it’s important to accept your mistakes as part of the path to success. Each of them has value, says Eccie, as you can learn from them. The process also enables you to evaluate your actions, as well as practise patience throughout the sometimes-frustrating chapters of running a business.
“When you’re bootstrapping, everything is a trade-0ff,” she says. “Everything comes at a price and you might not get what you want straight away. Everything takes time, and you have to really think before you make any kind of financial decision and think through the outcomes. It’s a great way to work as it helps you understand the consequences of your actions.”
Top tips for scaling up
- Have patience with the process of seeking investment. Don’t be disheartened if it takes longer than you’d hoped.
- Seek out new opportunities to connect with other female entrepreneurs. It can help you gain valuable insights, open doors and build your confidence ahead of pitching.
- Develop a thick skin. Raising capital can be filled with rejection and disappointment – accept it as a learning opportunity and move on.
- Get familiar with your figures. Knowing your numbers inside out – and being comfortable talking about them – is important for getting investors on-board.
- Be bold, and don’t be afraid to make mistakes. They will help you grow as an entrepreneur and enable you to fine-tune your strategy for the future.
If you’re ready to take that next step to achieve your growth goals, find the tools, connections and support to make it happen.