Expanding Your Small Business

See also: PESTLE Analysis

One of the hardest moments in the life of any small business is the point of scaling-up or expanding your small business. This is the point at which you move from doing it all yourself, often on a shoestring budget, and quite possibly from your kitchen table, to relying on others. You might need to employ people directly, or use self-employed contractors, and possibly move to dedicated premises. You may also need new IT systems to ensure that you are able to operate in a professional way.

Essentially, this is the point at which you move from being a ‘jack of all trades’, personally responsible for everything that happens in your business, to become the organisation’s leader. You are still responsible—but in a different way. This step will therefore probably require you to develop several new areas of skill and expertise, such as management skills.

This page discusses some of the decisions you will need to make, and the skills you will need in the process.

People: Employment and Management

It usually becomes clear that you need additional people when you are no longer able to meet your customers’ demands by yourself.

At this point, you have a choice: you can recruit some employees, or you can find some self-employed contractors to work for you, either full-time or part-time. There are advantages and disadvantages to both. These include:

  • Using self-employed contractors allows you to scale your capacity up and down to meet demand. The amount of time that you use can vary each week or month, or expand in future if necessary.

  • Using self-employed contractors is likely to be more expensive on an hourly basis. However, it means that you avoid some of the hidden costs of employment, such as employers’ taxes and holiday and sick pay.

  • It is easier to get rid of contractors than employees if the relationship doesn’t work out. You are not obliged to give notice (unless this is included in the contract), and you can also engage them for a trial period.

  • When you come to scale-up further with a self-employed contractor, you may find that they are no longer available—or not at the time that you need. They will have other demands on their time, and other clients. Employees will need to be paid regardless of the level of work available, but you know that they will be there when you need them.

There is more about this important employment decision here.

A Crucial Question: Incorporation

Some entrepreneurs set their businesses up as a limited company from the start of its life.

However, many others remain sole traders for some time. This means that starting to scale up triggers decisions about this important legal question.

Generally speaking, once you start to employ staff, and/or you have premises and therefore obligations and potential liabilities, you should be registered as a company.

You will therefore need to incorporate as soon as possible.

Employing staff or contractors will also mean that you need some important skills yourself. These include:

Location, Location, Location

Your staff (employees or contractors) may be able to work remotely. However, if not, you will need to consider the question of premises.

You may already have taken this decision. For example, you may be unable to run a business from your home because your lease does not permit it, or because you have too many distractions at home, such as a young family.

If you rent space in a shared office or working space, you may be able to expand your space to include other staff. However, it is also worth giving some thought to whether this is the best option.

It is relatively easy to move yourself, but harder once you have several members of staff to consider. It is therefore worth thinking about whether the location is ideal. You should consider issues such as access to the location by car or public transport for both your staff and any visitors, the facilities and services available both now and in future (including connectivity and IT), and the potential to expand further in the same location.

Systems and Equipment: IT and Other Technology

Another question that you need to consider is systems and equipment, and what your staff will need.

Self-employed contractors will probably supply their own laptops and phones. However, if you are employing staff, you will need to provide equipment. This will include office furniture unless you rent serviced premises, and any IT equipment that is required.

Additionally, anyone who works on your premises will need access to broadband. It is not reasonable to expect everyone to create wireless hotspots just to send you an email! You will therefore need a contract for internet services unless this is included in your rent. You should also consider other business IT issues such as business email services, and back-up and storage issues.

The crucial question in all of this is what you need to do to look professional. You want to give your clients (and contractors) a good impression of you and your business.

This means professional IT and business services: efficient, usable and reliable services across the board.


If you have reached the point of starting to scale up your small business, you are already doing well as an entrepreneur.

However, scaling up is a tricky time for any business. Many would say it is also a pivotal time.

As the business owner, you have to make some very important decisions. You may also need to develop new skills, especially if you have not previously run a business or managed staff. This will take time, and you will not always get it right first time. The key is to recognise that your role is changing, and that you must also change—or employ others with the skills that you need.

About the Author

Melissa has been writing content for SkillsYouNeed since 2013. She holds an MBA and previously worked as a civil servant. Now with a young family, she is learning all about applying her skills to real life.