LOVESPACE is an award-winning storage company that offers storage and delivery services across the UK; as well as operational and logistical support to New and Growing Companies by transporting equipment and storing anything from surplus stock to archived documentation.
All Workspace customers can secure an exclusive discount of 50% off their first two months’ worth of by-the-box storage.
We caught up with Steve to find out more about the growth of LOVESPACE and how it has successfully managed to scale up and maintain such an impressive growth curve.
Scale-up funding Vs Start-up funding
By 2015, LOVESPACE had successfully secured start-up funding totalling £4m. It helped underpin the company’s rebranding and move to a new warehouse to accommodate early demand.
We asked Steve whether it’s harder to secure investment capital as a scale-up business than it is for an early-stage business:
“I suppose the statistics would say, yes, it is more difficult. More businesses receive seed funding than scale-up funding,” said Steve.
“At start-up stage, funders are backing an idea, a founding team, and often little more than a proof of concept.
“The story is all about opportunity – in our case we talked about how we would disrupt a £1bn storage industry by offering a more convenient, better value by-the-box offering.
“When you get to scale-up stage, you have proven more things and the investors have a much better view on the size of the prize. For some businesses like ours, you can show strong evidence of future growth.
“For many others, you have proven that the opportunity doesn’t exist, or is not sufficiently large enough to justify further investment.”
What makes a 'scale-up' business?
Determining exactly how a business is labelled a ‘scale-up’ as opposed to a ‘start-up’ is another area many entrepreneurs and business owners often seek clarification on.
When asked about the key performance indicators LOVESPACE used to determine when they should be viewed as a scale-up, Steve believes the terms start-up and scale-up are somewhat arbitrary in the reality of business.
“We didn’t wake up one day and say ‘right, we’re done with being a start-up; we’re now a scale-up’,” added Steve.
“Having said that, it does feel like we are in a very different phase now. We know the economics of our business; we know broadly who and where our customers are.
“It’s now about investing more deliberately behind those areas that will drive the biggest value and continuing to optimise the business on a day-by-day basis.”
Futureproofing business processes
One of the clear differences between a start-up and a scale-up business is the day-to-day business processes. Steve admits that the LOVESPACE team has had to focus more of its energies on redesigning and futureproofing business processes.
“Firstly, you need to make sure your business can scale without breaking,” said Steve. “For a business like ours, which offers next-day collection and delivery across the UK, that is pretty critical!”
“In our first year, we grew more than 20x month-on-month and had to move from somewhat ad-hoc processes to much more consistent ones and develop the tech to support it.
“The other reason to focus on business processes is that, as you grow, the cash benefits of running a leaner operation are much more significant.
“It’s completely a question of timing. There’s no point in the early days optimising a business that serves just a couple of customers – your focus then needs to be on selling.”
The need for a rock-solid business culture and recruitment strategy
Steve insists that building a strong business culture is extremely important as a growing company.
However, in terms of recruitment, he believe it’s a somewhat utopian view that business owners can simply focus on quality and the right cultural fit, as sometimes there’s just a need for “bums on seats” and a need to “compromise”.
“A strong business culture comes more than anything from the way the founding team behaves, the norms you set and the people you hire,” Steve suggested.
“For us, it’s always been about being obsessed by the customer, building a better business every day and allowing people to be themselves.
“It’s a little magic. You can see it in the weekly rituals of the team, you can hear it in the conversations on nights out and you feel it most strongly when your culture clashes with a partner, supplier or new hire.
“In terms of recruitment, if I had infinite time, I would always focus on ‘quality’ and cultural fit when hiring. The reality as you scale is that sometimes you just need bums on seats and you do have to compromise.
“Without doubt though, the most important criteria is cultural fit and attitude. You can coach for skills, you can give the inexperienced more experience, but you can’t change people’s personality.”
A scale-up business also requires the ability to scale-up their business space with ease. Steve revealed that LOVESPACE had moved office five times in its four-year existence, but this was only made possible by their flexible arrangement with Workspace.
“In our four-year life we have moved office five times and have been in three different Workspace locations, including Club Workspace,” Steve revealed.
“Spending time worrying about leases, office fit-outs and rental agreements is time that you could be focusing on growing your business.
“I’m a big believer that all businesses should spend 90% of their time on things that they do really well and that matter to the customer and let others take care of the 10%.
“That, for instance, is one of the reasons more and more growing businesses are using LOVESPACE to look after their storage and fulfilment needs.”
Scaling any successful business is an important part of growth, but it’s easy to make mistakes along the way. By taking into consideration many of the issues discussed such as business culture, recruitment and flexible office space, start-ups can create the right environment and platform for long-term growth.