{"id":6811,"date":"2019-09-17T10:00:25","date_gmt":"2019-09-17T09:00:25","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=6811"},"modified":"2026-07-09T15:28:46","modified_gmt":"2026-07-09T14:28:46","slug":"grow-small-firm-medium-business","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/grow-small-firm-medium-business\/","title":{"rendered":"How to effectively grow your small firm into a medium business"},"content":{"rendered":"
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\n\t\t\t\t\t\tHow to effectively grow your small firm into a medium business\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Sabuhi\t\t\t\tSabuhi Gard<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

As a business owner, there comes a time when you realise your firm is changing from a small to a medium business. This realisation can come as quite a shock (as well as a time of excitement), so you’ll need to be prepared.<\/p>\n\n\n\n

This article will highlight the complexities you need to be aware of and how the right business management software can help you stay on top of things.<\/p>\n\n\n\n

Moving away from being a small business<\/h2>\n\n\n\n

Rob Moore and Mark Homer set up property investment firm Progressive Property<\/a> in 2007 with the help of family members, two salespeople, one marketing person and a personal assistant. Since then, their business has grown considerably.<\/p>\n\n\n\n

Moore says: “As a medium-sized business, we grew from 35 staff. We then hired a head of human resources to manage the managers, staff and culture. That HR department expanded; we then employed 50 staff. Now, we currently have 86 staff in-house and up to 100 outsourced employees.<\/p>\n\n\n\n

He points out how things can feel different between a small business and a medium-sized one: “In a small business, you can have a family culture and feel; everyone can muck in with a feeling of spirit and togetherness. When you grow, sometimes you can lose this.<\/p>\n\n\n\n

“It’s far easier to track all costs and metrics in a small business as there are fewer moving parts.<\/p>\n\n\n\n

“As you scale, there can be simply too many customers and staff to keep a close eye on everything, and your business can become very wasteful. You can lose touch with your customers and your service, which build your business in the first place.<\/p>\n\n\n\n

“Founders especially can find it hard to let go. Micro-management can occur as the founder and high-level managers have to delegate responsibility down.<\/p>\n\n\n\n

“Some founders are very good at starting businesses and have entrepreneurial spirit and flare. But they don’t have the different skills required, or passions, to take the business through to medium and large scale.”<\/p>\n\n\n\n

Dealing with complexity as you turn into a medium business<\/h2>\n\n\n\n

There are many complex issues to consider in the move from small to medium-sized business, from delegation and cash flow management<\/a> to organisation.<\/p>\n\n\n\n

Moore highlights the complexities: “As you scale up, staff can get overworked and overwhelmed. Your costs go up, sometimes disproportionate to the extra revenue you’re making, and, as such, your margins can reduce.<\/p>\n\n\n\n

“Your culture and organisation can become very chaotic and reactive, where nothing seems to be ordered. Staff can leave under the pressure, and you could be left with not enough people and the inability to hire a good-quality replacement quickly enough.<\/p>\n\n\n\n

“Your costs go up again for the recruitment of the right staff, and it becomes harder to track and measure your finances and key performance indicators. It is wise to manage growth progressively as opposed to aggressively and to track all increased costs.”<\/p>\n\n\n\n

Mike Smith, director of alternative business finance solutions firm Business Expert<\/a>, shares five tips to help you grow your business:<\/p>\n\n\n\n

1. Delegation is what you need<\/h3>\n\n\n\n

When done well, delegation creates real accountability and good people will always step up to the mark.<\/p>\n\n\n\n

2. Plan for mistakes<\/h3>\n\n\n\n

Identify worst-case scenarios to prepare for potential damage. Moving from a small to a medium business can come with risks and mistakes, so plan for these in advance.<\/p>\n\n\n\n

Mistakes can relate to disorganised accounting, taking on too much debt or even focusing too much on sales and marketing of your business.<\/p>\n\n\n\n

Disorganised accounting<\/h3>\n\n\n\n

One of the biggest scaling mistakes growing companies make is losing track of accounting and drowning in disorganisation. Not only is this frustrating, it can also have serious tax and legal consequences.<\/p>\n\n\n\n

To avoid this, hire a professional who is responsible for staying on top of the company’s finances, and make sure to adopt small business accounting software<\/a> as early as you can afford to.<\/p>\n\n\n\n

And simplify your invoicing process. Failure to collect payments on time can have a knock-on effect for cash flow.<\/p>\n\n\n\n

Too much debt<\/h3>\n\n\n\n

Debt is a strategic tool for growth but it’s not something to become reliant on. Whenever possible, try negotiating instead of taking on more debt. If you’re in the B2B world, this is especially useful.<\/p>\n\n\n\n

You can offer your services to a company in return for theirs. By building out this network, you lower your overhead expenses and prevent the need for excessive debt. Obviously, this can’t be done with everything but it is a valuable strategy in many situations.<\/p>\n\n\n\n

Too much focus on sales and marketing<\/h3>\n\n\n\n

When growth is the primary focus of everything you do, you’re inclined to spend all of your time and resources on sales and marketing. After all, that’s how you get new customers. But this may be a mistake.<\/p>\n\n\n\n

When all of your attention goes to these areas, you neglect creating value for your customers. Innovation goes by the wayside and customer service takes a back seat. The result could be a poor customer experience that negates any progress you make on the sales and marketing front.<\/p>\n\n\n\n

3. Find and retain the right people<\/h3>\n\n\n\n

Finding and keeping the right people in a business is crucial to its future growth. As your company grows, key roles need to be filled, and the right experience and skills are vital. Aim to know the next two people you hire and make sure it’s well thought through rather than a ‘distress purchase’.<\/p>\n\n\n\n

David Kelly, general manager for EMEA at Deputy<\/a>, a workforce management app, says: “To grow sustainably and retain talent, you need to bring people on the journey with you.<\/p>\n\n\n\n

“Pay them properly and on time, and prove work will fit into their life. Investing in tools that allow you to do this will build trust among a dedicated workforce who will be your engine for growth.<\/p>\n\n\n\n

“Startups and small businesses need the ability to scale up quickly and resource new contracts. Winning new business won’t be the challenge resourcing to deliver it will.<\/p>\n\n\n\n

“It’s a huge investment to employ someone else, so flexible workers are ideal for startups. As you grow, you also need to empower your managers to be successful. You need to know who’s working where, when to deploy people, how to deal with absence and so on.”<\/p>\n\n\n\n

4. Measure performance and progress<\/h3>\n\n\n\n

Make a clear distinction between short-term performance and long-term strategic progress. Long-term insights need to be assessed in order to plan for a successful future.<\/p>\n\n\n\n

5. Put systems and processes in place<\/h3>\n\n\n\n

To scale up any business, you need the right systems and processes in place to ensure activities are efficient and compliant, and continue to deliver for your customers.<\/p>\n\n\n\n

If your business is growing and you still have the same systems and processes in place that you were using three years ago, chances are you have already outgrown them.<\/p>\n\n\n\n

Growth strategies to consider<\/h2>\n\n\n\n

Once you have objectives, part of developing a strategy for growth involves thinking about possible barriers to scaling up.<\/p>\n\n\n\n

There are several factors that could thwart your ambitions to grow, such as a lack of leadership skills, lack of funding and weak cash flow<\/a>.<\/p>\n\n\n\n

For Shermeena Rabbi, consultant speech and language therapist, and founder of Unlocking Language<\/a>, one of the biggest complexities of scaling up has been retaining and maintaining staff.<\/p>\n\n\n\n

She says: “As we’ve grown and built up our reputation in the industry, we have received more attention from prospective job candidates.<\/p>\n\n\n\n

“However, ensuring that new hires can maintain the quality of service and business values we are known for now is difficult.<\/p>\n\n\n\n

“This factor is particularly important among senior staff.<\/p>\n\n\n\n

“Not only are they responsible for promoting these values among junior staff but as my role becomes less personal and more management focused, they are the people responsible for ensuring these values are felt with our clients.”<\/p>\n\n\n\n

Adam Hadley, CEO and founder of data science consultancy QuantSpark<\/a>, says his growth strategy involves “a balance of opportunity, capability and capacity”.<\/p>\n\n\n\n

He adds: “Our biggest challenge is in growing the team quickly enough in a highly competitive market like London.<\/p>\n\n\n\n

“As a data science consultancy, we’re focused on pioneering the strategic application of data science and analytics to develop complex decision-support tools.<\/p>\n\n\n\n

“About half our revenue is from consulting and half from software development. Our aim is to start generating more revenue from software licensing fees. In the meantime, we reinvest all of our revenue in software development.”<\/p>\n\n\n\n

Overall, a credible scaling strategy is fundamental and you should be able to address the following:<\/p>\n\n\n\n