Sir Richard Harpin

The UK is brilliant at starting businesses.

We are terrible at scaling them because we ignore these signs.

I see this frequently working with founders running businesses between £3m and £100m.

They have ambition, and the hard work is there.

But a handful of things are holding them back from making that step-change to a large company.

Take it from me. I made most of these mistakes myself at HomeServe.

Here are the 8 warning signs your business is not ready to scale:
(And how to fix them to ensure it is...)

1️⃣ You haven't proved the model
↳ Scaling costs before you have a working model does not create economies of scale.

Stay small and keep testing until the cash comes in consistently.

2️⃣ You are still doing the CEO's job
↳ If every decision runs through you, the business cannot grow beyond you.

Hire your replacement. Find someone better than you to run the day-to-day. Then work on the business, not in it.

3️⃣ You cannot explain your strategy in a sentence
↳ If your team cannot tell you what the business does and why in one sentence, it is not clear enough to execute.

Answer three questions: what are you passionate about, what can you be the best at, and how will you make money. Write it in 20 words or fewer.

4️⃣ You are chasing too many ideas
↳ The history of HomeServe is littered with mistakes brought on by my instinct for grabbing every shiny new idea.

Build a not-to-do list. If it does not fit your 20-word strategy, it goes on the list.

5️⃣ Your culture hasn't kept pace with your headcount 
↳ Scaling too fast without defined values nearly cost us the culture that made HomeServe successful.

Define three to five core values. Every employee should know what the business stands for and why it matters.

6️⃣ You cannot predict cash flow
↳ If your cash flow is unstable or unpredictable, you are not ready to focus on revenue and profit yet.

Look at cash flow every week without fail. Only when it is stable and consistent can you shift your attention to scaling revenue and improving margins.

7️⃣ You are still trying to reinvent the wheel, instead of evolving 
↳ When HomeServe strayed into furniture warranties, we lost money and had to sell it off to refocus on what was working.

Ask yourself honestly: Are you clear on your product market fit and what your core is ? If not, you will run into problems scaling.

8️⃣ You have no one to challenge your thinking
↳ When I was building HomeServe, I had no peer group of fellow founders to learn from.

You will scale faster with fewer wrong turns when you find the right counsel.

That's precisely why I've begun sending out my weekly newsletter, How to Make a Billion. 

Subscribe here to start reading: https://lnkd.in/ergDQtiK

I started a small fly-tying business as a teenager.

And it helped me grow my business to £4.1bn...

Now, that might seem like a stretch.

But the lessons that I learned back then about scaling have stayed with me for over 40 years as I built and scaled HomeServe.

Growth does not come from big, exciting ideas.

This is quite a stubborn myth that entrepreneurs hold on to.

But a breakthrough moment is far too rare to rely on.

When I started my fly-tying business, the goal was simple: make a bit of money.

At first, I got many, many things wrong.

Selling via a retailer meant my margins were too tight.

So I shifted to a B2C model, selling the materials direct to other fly tyers.

That one change allowed me to prove the model and start growing the business.

But what sustained that growth was consistency.

Each year, over 4 years, I made small improvements:

- Better pricing
- Better packaging
- Importing direct 
- A wider product range

Nothing was revolutionary; everything was incremental.

And the results proved that it was working.

Profits doubled the following year. And doubled again.

That experience as a teenager shaped how I built every business after that, including HomeServe.

Here’s what I learnt:

Most founders are chasing the next big idea when they should be improving the one they already have.

Scaling isn’t about constant reinvention so much as getting 1% better, again and again.

And it's what allowed me to build real momentum at HomeServe.

In the end, those small improvements compound into something very big.

Which is, as it were, the secret to building something ambitious and successful.

If you want to learn exactly what it takes to build and scale a billion-pound business...

Subscribe to my newsletter, How to Make a Billion: https://lnkd.in/ergDQtiK

It's your weekly guide to the nine proven steps that helped me scale HomeServe to a £4.1B FTSE 100 company.

Comment below if you had a childhood business. 
Or share what you're building at the moment.

I'd be happy to hear from fellow life-long entrepreneurs.