Accountancy & Banking

Matt Trowbridge, Senior Manager – Accounts at Saffery looks at business growth factors and we meet Audit Senior Associate Edward Holly

By Matt Trowbridge [email protected]

Published: February 4, 2025 | Updated: 4th February 2025

Almost all businesses begin as start-ups with only a handful of customers. While there are many lifestyle businesses out there, happy to tread water and provide the owner with a desired quality of life, the majority will measure success by their growth: both financial and operational.

In this article, we consider some of the factors that enable businesses to grow, and also to scale successfully as the two are not always synonymous.

There are many strategies for companies to increase their top line and profitability, and even a cursory review of successful businesses will demonstrate that there is no one model that works for everyone. There are generally several possible growth strategies that can straightforwardly apply to a given business – but the same cannot necessarily be said for scaling strategies.

Growth versus scale

Broadly, growth is where revenue and costs increase in step with each other: selling more products or hiring more consultants to provide hourly services. Profit does grow with turnover under this model, but it can take a long time to do so. Scaling a business requires a change in model: pushing a rapid increase in turnover with one hand while controlling costs with the other, for instance by selling a pre-existing software solution to more customers with low marginal cost. In this scenario, as both revenue and margin are increasing, the growth in profit is significantly accelerated.

Which strategy is the best fit depends on your end goal for the business. For lifestyle businesses, a steady increase in profitability through the growth strategy allows a good balance between quality of life and a sustainable business. However, where the aim is ultimately to exit the business, demonstrating a scalable business model is a key way to attract potential buyers, particularly in private equity.

The traditional view is that certain sectors are more amenable to a scalable business model. Investors looks for predictable, recurring revenues, a subscription-based model and high customer retention rates. Growth is driven by expenditure that is focussed on sales and marketing, not labour intensive, and not highly dependent on investment in plant and machinery.

It remains true that certain sectors are not an easy fit for scaling strategies – manufacturing jumps out as an obvious example. However, technology continues to disrupt traditional sectors, opening up opportunities to capitalise on artificial intelligence, big data and increased consumer willingness to engage with subscription models. Twenty years ago, how many of us would have said the sale of DVDs would be ripe for scaling? But now the explosion of video-on-demand services shows how technology and innovation can influence evolving strategies.

Growth strategies

Growth strategies are many and varied, and so you should seek to adopt one suited to your business.

At a local level, reputation and word of mouth are powerful ways of attracting loyal customers, while companies with a wider geographic reach are likely to need to devote more resources to sales and marketing. However, it is important not to cast the net too wide, as targeted marketing activities are likely to be more productive in building a strong customer base. Expanding into new geographic regions is a well-trodden path for growth; the increase in remote working and e-commerce potentially makes that more straightforward than historically. Businesses can also look to grow through expanding existing product or service lines or vertical integration up or down the supply chain.

Organic growth can provide a steady increase in profit, and is typically lower risk than alternatives, but step changes in growth can be achieved through acquisition. Caution should be urged here; carefully targeted acquisitions can create real value for a business, but poorly thought through purchases can be highly disruptive to both businesses. It is always important to undertake an appropriate level of due diligence, and to have a reason for a purchase which goes beyond growing revenue. For example, are you looking to expand your geographic reach, or add a new service line to your offering that customers will value?

Regardless of the strategy, a business needs to be clear on its desired destination before trying to define how it will get there. Clear communication is key; all employees and management need to be aware of the business’ values, objectives and strategy so that they can buy in and work towards those goals.

Building the foundations for growth

With any growth, and particularly when scaling, existing weaknesses in the business will magnify as it expands. For example, gaps in the official sales process – filled in by employee goodwill when a company is small – can cause your reputation for customer service to drop rapidly as you grow. Similar weaknesses can crop up in many areas: debt collection, approval processes for purchases or stock management are common ones that become more apparent as a business grows.

It is always easier to get the fundamentals in place before you start to grow, allowing you to focus on expansion rather than continually firefighting.

A key part of this is appointing appropriate management, who can take responsibility for business as usual while you oversee the expansion. Bringing them on board at an early stage builds loyalty with your organisation and allows them to understand your processes before they become too big to readily visualise. Clearly, appropriate incentive schemes are necessary to attract this sort of long term buy-in to the business.

External support from professional advisors can boost your internal management team, particularly in areas where you do not have personal experience, and do not need to employ someone with that skillset on a day-to-day basis. Having trusted advisers you can turn to, when appropriate, can help to identify the optimal solution for a given issue and, again, free up your time to focus on the big picture.

Systems and controls need to be robust before expansion begins, ideally automated with minimal reliance on key individuals to ‘future-proof’ the business against a rapid increase in the volume of transactions. Investment in IT infrastructure and software is likely to be required, both on the operational and financial side, but also investment in the back-office teams that keep the business running smoothly – finance, IT and HR are all part of the systems. Both people and the software need to be able to communicate easily, and there are a wide range of off the shelf products that will help you to do that, even if the teams are all working remotely.

Funding

The above does require investment in terms of both time and money. While some businesses may be able to extract sufficient cash from their working capital to fund growth, many will need to seek external funding.

Appropriate use of an overdraft or invoice discounting may enable a business to fund working capital, which is particularly useful when adopting organic growth. But a more long-term solution is often appropriate to achieve a step change in growth. Banks, alternative finance providers and private equity all have their place, and which is the most appropriate for a given business will depend on the requirements of the business and, crucially, the support required by the business founder to achieve their goals.

If you have any questions on the points raised here, please contact Matt Trowbridge, email [email protected]

***

Name: Edward Holly

Role: Audit Senior Associate

Time at Saffery: 3 years 5 months

What’s the best bit about your job?

One of the aspects I enjoy most about my job is the exposure to a diverse range of companies across various industries, this keeps the work interesting as no two weeks are the same but has also broadened my knowledge about business operations and the variety of sectors that they operate in. In addition, my role gives me the chance to visit audit clients at their premises which offers valuable opportunities to meet clients face-to-face and build relationships. Building rapport with clients is something I find particularly rewarding.

Another great part of my job is the strong camaraderie that I share with my colleagues. There’s a great team dynamic both inside and outside of the office. The sense of support and shared purpose makes the work environment enjoyable.

The culture of Saffery is really important to the business and the people within it – what do you think you bring to the team and what do you contribute?

I have a ‘can do’ attitude to work and volunteer where I can take on extra pieces of work to gain exposure to different tasks, but also helps out other members of the team when they are busy to ease workload.

We have regular intakes of new trainees and will often work with them on my jobs, I will spend time coaching them to aid their own understanding of the audit process and technical areas.

I am also what is known as a ‘superuser’ of the accounts production software we use, this involves me helping anyone in the office that needs support making updates in accounts which can range from simple queries to more complex disclosure adjustments. I also deliver the training on how to use this software to the new starters.

If you weren’t doing this role, what might you be doing?

When I was younger, I was determined I was going to be an airline pilot as I was very interested in all things aviation and started taking flying lessons. Other than that, I did a degree in Biochemistry and nutrition so I would have probably gone into that had I not gone into audit.

My other dream job used to be to work as a presenter on Top Gear!

What do you enjoy doing outside of work?

At the weekends I enjoy getting outside and going on walks in the countryside or along the coast. I find this helps me unwind but also sets me up for the week ahead again.

I also enjoy meeting up with family and friends to have coffee.

Tell us something about yourself that we don’t know.

I am very much a car nerd, I love all things to do with cars and am very interested in knowing how they work from the workings of engines to knowing all the new and classic models of cars. I will often visit motor shows which is another one of my favourite pastimes. One day I would love to restore an old classic and do it myself from the ground up, even if it took me years! My dream car would have to be a Morgan plus 6.

Who or what inspires you?

I find I am more motivated than inspired. I am motivated to do my job the best that I can either through delivering good audit files to management or giving excellent client service. I set short term and long-term goals of where I want to be by when – achieving these personal goals motivates me. On a more personal level, I want to do the best I can in my career for my family.

What’s your favourite place in Dorset?

I would say my favourite place to go in Dorset is Knowle Beach and up to Old Harry Rocks, as I mentioned I enjoy getting outside and here is one of my favourite places to go and embrace the elements. Technically just over the border but Bowerchalke in the Cranborne Chase area also holds a lot of happy memories for me having recently got married there.

Give 3 words to describe yourself.

Quiet, hard-working, optimistic

Latest Posts

Matt Trowbridge, Senior Manager – Accounts at Saffery looks at business growth factors and we meet Audit Senior Associate Edward Holly

Saffery to host finance directors seminar at AFC Bournemouth’s Vitality Stadium next week

Saffery Partner Jamie Lane looks at subsidiary audit exemption and we meet Associate – Personal Tax, Claudia Painter

Saffery Bournemouth making a difference with this year's festive initiative

Personal tax director Suzanne Wasson looks at succession planning and we meet audit manager Daniel Snoxell

All Accountancy & Banking Stories »

Latest Posts

Health Sciences University to provide check-ups and facilitate trials for dementia at new clinic

From post-event kickabouts to a rising app, four footie fans are helping amateur players connect

Organisers hail ‘sheer variety and quality’ of winners at 12th annual Dorset Tourism Awards

Bournemouth Beach is the place to be for half term as Oceanarium & RockReef host joint promotion

Innovative healthcare & wearable tech catch investors’ eyes at Dorset Business Angels event

All Latest News »