Smailes Goldie: Scaling up is difficult because businesses are more like buildings than balloons

Headline Partner • Spring 2022

Pump air into a balloon and it gets bigger.

It seems like a useful analogy for growing a business; increase your sales and your business will grow accordingly.

But people who try to sell you this vision in best-selling books, on YouTube, TikTok and social media are – much like their pet analogy – full of hot air.

In reality, growing a business is nothing like inflating a balloon. The shape and structure of a balloon does not change at all as it inflates. But bigger businesses are fundamentally different from smaller businesses. They must change as they grow.

Buildings are better analogies than balloons for growing businesses.

The foundations and utilities of a single storey building might serve it well, but if you start adding more storeys, those foundations will quickly crumble, while the building’s infrastructure and utilities will quickly be overwhelmed.

To add stories, you will need to underpin your foundations to support the extra weight, increase your internet bandwidth, install a bigger boiler and increase the capacity of your electrics and plumbing – all before you generate any rental income.

Similarly, as a business grows, so do the challenges of coordinating and managing increasing numbers of employees, as well as increasing output and potentially working across multiple premises.

Just as with buildings, what makes this particularly challenging is that these logistical and support functions often need to be in place before you can ramp up sales and, therefore, revenue. Putting these functions in place can be very costly, even with the welcome development of various low-cost cloud solutions.

This often puts considerable pressure on the cashflow of growing businesses and sometimes putting – at least what feels like – a ceiling on viable growth.

Property developers and their project managers overcome these challenges with meticulous planning, both logistical and financial.

And that is key too for SMEs looking to grow. With careful planning, it is possible to overcome cashflow hurdles and achieve your full potential when it comes to growth.

It is no coincidence that we chose to name our business advisory service SG Blueprint. We will help you plan the growth of your business, enabling you to put strong foundations in place.