Launching a startup is a courageous step and if you are now looking at growing your startup business - then congratulations! Surviving the startup phase is a huge achievement and the fact that you are in a position to grow should provide you with the confidence that you can.
Although there is a lot of information available regarding starting a business, not so much exists around growing it. To demystify business growth our team has provided the answers to some of our client's most frequently asked questions on growing a business.
1. How do I know I am ready to grow my business?
It is not always easy to know when your business is ready to take the next step in growth, whether that be hiring your first employee, partnering with an overseas distributor, or seeking investment. However, if the following applies, your startup is probably ready to move on to the next level:
- You are turning business away because you are at full capacity (although check you do not simply need to raise your prices)
- You have regular customers who are asking for different products or longer opening hours
- Your cashflow is steady and your profits are increasing
- The industry you operate in is growing
It is also important to trust your intuition. If your gut is telling you the time has come to take the risks needed to grow your business, listen to it.
2. Where do I find the funds to expand my business?
As the cliché goes, one needs to spend money to make money. Even if you bootstrapped your startup, unless you are turning over massive profits, you are going to need to take out a business loan or attract an investor to achieve your commercial ambitions.
If you plan to access funds via a loan, make sure you have the loan agreement checked by an experienced solicitor before signing it. Business loan contracts can contain lethal traps for the unwary, therefore protect your interests by taking professional advice.
The other way to get the capital you need to grow your business is by taking on an investor. This can be achieved through seed funding, where family, friends, and/or an angel investor provide the money you need in exchange for a share of the business.
If you have already been through a round of seed funding, it may be time to seek Series A funding from a venture capitalist. We have written an extensive guide on Series A, B, and C funding.
3. What are the legal requirements for hiring an employee?
Hiring your first employee is a major step and one that should not be taken lightly. Before you place an advertisement consider whether the position could be filled using a self-employed contractor or freelancer. If everything points to the need to hire a part-time or full-time employee, you need to ensure:
- When you advertise for the position the advert complies with the Equality Act 2010 and does not discriminate directly or indirectly against anyone who has one or more of the nine protected characteristics, namely sex, sexual orientation, race, gender reassignment, pregnancy and maternity, religion or beliefs, marriage or civil partnership.
- You present your new employee with a Written Statement of Particulars. Although you do not have to provide an Employment Contract, by law all new employees must have a Statement of Particulars which includes details such as how much and when they will be paid, and the hours and location of their work, on their first day.
- Your employment contract and staff handbook set out all the necessary terms of employment, including grievance procedures and anti-bullying policies. It is always best practice to have an employment law solicitor check that your contract and staff handbook is legally compliant and protect your interests.
The above is only a small sample of employment law matters you will need to consider when hiring your first employee. Our team of lawyers can assist you with all aspects of employment law and guide you through the exciting process of expanding your team.
4. How do I build my brand?
Growing your business does not necessarily mean taking on staff or launching new products. It may involve simply creating and growing a strong brand.
To achieve this you will need to have a regular social media presence, a clear business vision and strategy, and intellectual property protections in place. Concerning the latter, if you have a distinctive business name, symbol, or even smell, it can be protected by applying for a trademark.
And if your intellectual property consists of a new invention, it is vital to patent your innovation.
Intellectual property is a specialist and often complex area of law. If you want to protect your IP and/or deal with an infringement, our intellectual property lawyers can help.
Get legal assistance from LawBite
Expanding your startup to the next stage comes with risk. However, with a clear strategy, steady cashflow, and the right professional advisors around you, you can meet this next challenge confidently and successfully.
LawBite has years of experience helping startups and small business owners achieve their commercial ambitions. To find out how we help expand your business and provide affordable and easy to under legal advice, book a free 15 minute consultation today.