However, expansion is not just about rapid growth. It is also a different type of growth. “Normal” growth typically requires significant investments to increase a company’s revenue. Expansion involves massively increasing revenue while keeping costs relatively low.
Why do you want to expand your technology business?
Every business owner has their own motivation and journey. Many have the ambition, drive and vision to conquer the world. Others want to grow their business to sell it at a better price. Expansion is at the heart of their strategy.
However, expansion is also useful for those who simply want their business to remain small, be the best in their market and provide a great working environment. It improves profitability and helps you compete in a rapidly changing world.
An exciting time for expansion
You may have heard this before: “Canada is very good at creating high-quality tech startups, but it doesn’t produce many large tech companies – often called unicorns – that can serve as pillars in the community.
The reasons why we have fewer unicorns vary. Some founders struggle with a lack of local role models, the time it takes to scale to a global company, or an inability to secure funding. Others sell before they have a chance to scale, and their companies are bought by strategic acquirers or US rivals looking to steal their cutting-edge technology.
The lack of growing businesses is lowering Canada's level of innovation and hurting our economy.
What's interesting is that things are changing. We're building a stronger Canadian tech ecosystem, fostering ambition and incentivizing founders to wait longer and grow their companies before exiting.
Four Steps to Grow Your Tech Business
So how do you achieve this expansion? Over my 25 years at BDC, I’ve worked with hundreds of expanding and growing businesses at all stages of their development. I’ve found that it often comes down to hitting four critical milestones. If you can do these, your expansion is on the road to success.
1. How to create the right team and culture to ensure expansion?
When you have a tech startup, you have multiple roles as CEO. But you won't grow if you keep all of those roles. It's very important to hire the right people and delegate so that your company can run with little or no input from you. Good leadership actually means letting go!
Encourage your team to try new things, innovate, and even fail.
Hire people who will complement your strengths
We often hear this advice: hire people who know more than you. It seems logical, but it's not always easy to do.
The truly successful leaders I admire are able to let go of their ego, be humble, and realize that they can’t be experts in everything. Be honest with yourself and ask yourself , “What skills do I lack to grow my business?” Be honest. What are your knowledge gaps?
Trust your team
When a CEO doesn't trust and respect his or her management team, it's very difficult for his or her business to grow quickly.
When hiring, it’s critical to empower your hires to be experts in their field. Don’t get in their way. Encourage them to try new things, innovate , and even fail . Recognize learning instead of punishing failure.
The relationship between the CEO and the CFO is especially important. The CEO is expected to be optimistic and dream. Meanwhile, the CFO is watching the dollars. If these people don't work together effectively, it can be very difficult for the company to achieve its goals. But a company is in a great position to grow if they respect each other, listen to each other, and play to their respective strengths.
Build a team of advisors
The right team doesn’t just include your staff members. It’s also essential to surround yourself with people who can provide advice or mentorship.
Consider creating an advisory board and seeking mentors and advice from business incubators and accelerators . Growing companies also often turn to accountants, lawyers, and their bank for advice and contacts.
When a company doesn't have a good culture, you feel it the moment you walk into the office.
What is the right culture for successful expansion?
Having the right culture is essential to growing a technology company. Culture is an often overused word, and there is not always a broad consensus on how to create it.
One thing is for sure: when a company doesn’t have a good culture, you feel it the moment you walk into the office. You feel like the staff is unhappy. Or there’s no one to greet visitors. Staff turnover can be high. There’s no point thinking about expansion if you don’t have the right culture. The company may even be at risk of bankruptcy.
A good culture does not mean having a swimming pool, a basketball court or a happy hour on Friday nights. All of these are nice, but other aspects are more essential to culture:
- How is daily life going?
- Does your team feel valued and empowered?
- Or is it micromanaged, where every decision has to be lawyer database checked from above?
Culture is about leaders. If the top leader can't let go, he or she is holding the company back.
It is also important to develop a clear vision and mission for the company and communicate it. When everyone buys into it and believes in it, you are on your way to having a culture that is fit for expansion.
Operational efficiency isn't just for manufacturing companies.
2. How to create scalable processes?
Creating scalable processes typically requires investing in automation and other technologies. Often, in a startup, much of the work is done manually. One of the first steps to scaling is to look for ways to automate repetitive tasks in each function.
Increase your efficiency
Expansion goes hand in hand with efficiency gains . In a tech startup, the owner or management is often caught up in fixing problems. They don’t have the time or energy to be proactive and plan for the company’s growth.
For a business, lean manufacturing eliminates wasted effort and resources. Efficiency improvement projects aren’t just for manufacturing companies. They can help a technology company reduce costs, address chronic operational issues, drive innovation, improve retention and engagement, and create happier customers. Here are some helpful tips:
analyze your processes to identify the 8 types of waste ;
use structured problem-solving methods to identify root causes of recurring problems and optimal solutions;
monitor data to assess your business performance, measure improvements, and foster a culture of continuous improvement.
Many companies make the mistake of looking for a new market or developing new products on an ad hoc basis.
3. How to develop an expansion strategy?
Technology companies are constantly faced with growth opportunities. Choosing the right ones is often what separates a company that is growing from one that is growing more slowly or not at all. How do you do it?
The answer is: through strategic planning . Planning is essential for any business, and even more so if you are looking to expand. Many technology companies make the mistake of tackling a new market or developing new products on an ad hoc basis without assessing whether they will provide the best return.
Create a strategic plan
Strategic planning involves taking a step back and deciding what your goals are, then sitting down with your team to review all of your business opportunities. The idea is to choose the most promising ones, which you will focus on.
A good strategic plan includes an action plan that includes specific initiatives, timelines, and metrics, as well as who will be responsible for completing each project. Regular team meetings to discuss the plan’s progress are also important to ensure it doesn’t fall by the wayside. Meetings help rally staff and get everyone working together to achieve your expansion goals.
4. Where to find the funds needed for expansion?
Expansion requires investment. You may need money to hire staff, automate tasks, or carry out planning and operational efficiency projects.
