Contact us now if you would like to know more about the legal impacts of different methods of Scaling a Business.
Scaling A Business - Business Expansion
Scaling a Business to achieve greater revenue and profitability is a key milestone for any Business Owner, but it’s not always straightforward.
The 5 key questions to ask yourself when Scaling a Business are:
1. How do I Scale or Expand my Business?
You can Scale a Business in many different ways. How you do it will depend on various factors, including the type and size of your Business, the products or services you sell, and the markets you target, and what funding is available to you.
In our experience, the following are commonly used strategies for Scaling and Expanding a Business:
a) Online-Focused Expansion – For example, acquiring new customers or clients and/or selling products or supplying services online using digital marketing and other online activities;
b) Intellectual Property Licensing – Licensing intellectual property you own in exchange for ongoing licence fees or royalties;
c) Franchising – Licensing business systems, methods, trade marks and/or brand names which you own to franchisees who generally fund Business set up costs;
d) Mergers & Acquisitions – Acquiring or merging with competing or complimentary Businesses to grow revenue and increase Business efficiency; and
e) Physical Expansion – Physically expanding or relocating into new and/or additional markets.
2. What Legal Structures do I need to set up?
Scaling a Business generally involves significant changes to Business operations, such as hiring new staff, expanding into new markets, developing or launching new products, or moving into new geographical locations.
If you make operational changes, you often need to make corresponding changes to Legal Structures. For example, you may need to set up new Companies or Entities, enter into new contracts with third parties, or restructure your Business (legally and operationally).
If you aren’t sure what you need, we can assist you to create a legal action plan for your Business Expansion.
3. How do I protect myself from increased Business Risk?
You can protect yourself against increased Business Risk by using our three-layered approach:
a) Structure – Firstly, create new Structures to quarantine Business Assets (and Personal Assets) from new sources of Risk;
b) Client or Customer Contracts – Secondly, create or revise Terms and Conditions for your clients or customers to ensure that changes to your Risk Profile are appropriately accounted for; and
c) Insurance – Lastly, take out new Insurance, or extend existing Insurance cover, to guard against Legal Claims which cannot be overcome by smart structuring and robust contract terms.
Contact us now to discuss how to minimise the Risk to your Business and its Assets.
4. Do I need to Raise Capital for to Scale a Business?
Scaling a Business, or Expanding a Business, often makes it necessary to Raise Capital.
You can Raise Capital through issuing Equity (such as Shares), or taking out Loans (such as by issuing Notes to Investors/Lenders). However, you can also use a blend of the two, for example, by issuing Convertible Notes (notes convertible into shares).
Alternatively, you can Raise Funding from Banks and Financial Institutions, or non-bank private lenders, provided there is a revenue source from which the debt can be repaid.
We have assisted Businesses across all industries to Raise Capital to fund Scaling or Expansion activities. Reach out now for a free call with a lawyer to discuss your Capital Raising options.
5. What Legal Documents do I need for Scaling a Business?
If you are considering Expanding, you may have certain Key Legal Documents which you use for your Business. For example, Customer or Client Agreements or Terms and Conditions, Supplier Agreements, Business Premises Leases, and Equipment Leases.
It’s important to review your existing Legal Documents when Scaling a Business to ensure that they are appropriate for your Business and its future direction.
Also, reviewing your Legal Documents will make is easy to identify any missing pieces required for future activities.
If you would like to have your Legal Documents reviewed, we can provide a no-obligation preliminary review of your Legal Documents to identify any potential issues for your future plans.
