Over the last twenty years, the activities sector has made great strides in evidencing its professionalism. When you’re considering scaling your business, maintaining your service level, and professionalism needs to be at the forefront of your planning. With the stresses that the pandemic and political unrest have brought, focusing on evaluating your business’ growth potential is essential to adapting to future stresses.
Understanding when to say no
There is often a huge temptation to expand your delivery area through organic growth. Your passion may drive delivery on the ground, but expanding your delivery area can stretch you and your team to breaking point if you haven’t addressed its financial feasibility.
For Chris Vertannes, CEO of UKESG, a part of the international enterprise Planet Education, organic growth can be a thorn in the side of a successful scale-up. As a recent guest of The Drive Phase podcast, he added:
“I see companies today falling into that same trap. As your experience and the respect for your businesses grows, the easiest thing to do is to be entirely customer-led. Yet it’s consolidation and evaluation that is key to scaling in a manageable way.”
To scale an activities business, especially in the stage where organic growth is exponential, evaluate your profitability first. Making that move from delivery to management means processing and understanding your capacity from a logistical and financial viewpoint. Consider each expansion as a whole: examine your operations, sales, and marketing structures for the capacity to comfortably meet the requirements of new business.
Resist the race to the bottom
Customers will always be looking for the cheapest deal. Though for most, cheap does not necessarily yield quality. Organic growth that is customer-led can have this failing, leading you to undercut your operational spending, which in turn will make maintaining quality service impossible.
UKESG CEO, Chris Vertannes, describes this concept as the “race to the bottom”, and sees service quality as much a matter of pride as it is operational and logistical delivery standards.
“Don’t get caught up in the race to the bottom, for who can get what the cheapest. You’ll undercut your service level, and in the end, the whole business and its model will suffer.”
In the last few years, we have seen companies in the activities, sports, and fitness sectors move a good portion of their services online out of necessity. However, it is the models that did not handicap their services, undercutting themselves that could pivot to other models. For customers of Little Kickers, their pivot to a monthly subscription model that could be frozen allowed them to keep their customer base despite not delivering sessions.
Scale a business model you understand
The USP of your business model needs to be central to your brand identity and the core of the products you are creating. Yet what makes your business attractive as a consumer is different from what would make it attractive to a potential franchise owner.
Little Kickers CEO Christine Kelly chose to franchise her business model because she had seen a niche for people like herself. She wanted to produce something that would be financially meaningful for her and prospective franchise owners.
“It turned out that on average, our first franchises were all ex-career women. These women had had kids, and wanted to re-join the world of work but didn’t want to sacrifice seeing their kids grow up. Now the business is 50/50 when it comes to a male-female split. The core remains a model that is best for those who want a better work-life balance.”
Build your base
Mike Emery is the CEO of Joymo, a company established in 2017 to safely stream grassroots sports worldwide. For Mike Emery, much of the base of your business is where the mistakes are most likely to affect your scale-up. He sees the base as the team you hire, the toolset they have, your products, and the services you offer.
“We’ve probably made most of the mistakes that most start-ups make. But we’ve learned from those mistakes, and now have a great little team, have the right backers and we know we have a product that consumers want. Now, we’re better at looking at trends in the market and we’re better at taking advice.”
Hiring the right people rather than those that are convenient can strengthen the base of your business. As you look to scale, staying abreast of the trends in the market will help you develop those products where there is consumer demand. And evaluating your business’ progress rather than choosing the temptation of completely organic growth will create a manageable scale-up.
Choose a platform that understands the activities sector. As you grow, Coordinate Sport will be by your side to manage your bookings, admin, HR, plus everything in between. For less work on a spreadsheet and impact you can see, choose Coordinate Sport.