Starting your own business and making it successful can be challenging, especially in a highly competitive market. In addition, scaling up your start-up brings forth a completely new set of challenges and concerns that needs to be addressed by relevant experts such as an accountant, a business lawyer, and other professional services.
From a practical perspective, your business will require completely different skills than the ones you implemented when launching your start-up and making it successful. Accordingly, you will need to focus on both growth and risk in the scaling-up phase.
When planning ahead, it is essential to ensure your business has adequate resources to serve the demands of your clients. Additionally, you will also need to ensure that your resources are managed efficiently. To help you with making such plans, it is best to contact a corporate lawyer in Australia.
A business lawyer or legal professional can offer expert legal advice for taxation, guidance for executing various business strategies, and also recommend the best course of action to succeed.
What legal structures do you require to scale up a business
When you plan to scale up your business, you may need to implement significant changes in internal operations. Scaling up your business will involve hiring new employees to manage the additional responsibilities, expanding into new markets to acquire a larger customer base, launching new products or services, and geographical location expansion.
Moreover, your company’s legal structure may also need to change to better align with the operational changes. The best law firms in Australia will help you determine and enter new contracts with third parties by following the best legal pathway to restructure your business both legally and operationally.
Legal professionals can also help you plan and create a legal action plan for your start-up expansion.
Risk management for your start-up
You can protect your business from industry market and legal risks by implementing the following three-phased approach.
- Create a business structure – Plan, develop and implement new structures to protect your business assets (and personal assets if included) from new sources of risk that emerge during scale-up. Experts from the best law firms in Australia will provide you with expert legal guidance to safeguard your assets.
- Revise client or customer contracts – Draft or revise your business terms, conditions, and privacy policies for your clients and customers to ensure that modifications and upgrades to your risk profile are correctly accounted for.
- Cyber Security – ensure you engage IT experts to help you safeguard your data and your customer’s data and avoid falling into traps set by malicious actors.
- Business Insurance – Obtain new Insurance, or extend existing policy coverage, to have protection from legal claims which can’t be resolved even by smart structuring and carefully drafted contractual terms. Consulting with an independent insurance broker is one of the best ways to obtain the correct insurance policy.
Phases for raising capital to scale a business
Scaling a start-up or business expansion typically involves raising capital. You can raise capital in various ways, including the following:
- Issuing equity (such as shares)
- Allotting or transferring shares to investors (including venture capital companies).
- Applying for government grants. These are available for businesses fulfilling the grant criteria at a national, state and territory or local government level.
- Crowd funding may be available to some businesses.
- Raise funding from banks, other financial institutions, or private lenders, provided you have a revenue source for repaying the debt and sufficient assets to provide security for the loan.
An experienced corporate lawyer australia will guide you to raise capital for funding various expansion activities and discuss the best capital-raising option for your unique business requirement.
Moreover, acquiring funding or raising capital involves the following steps:
1. Seed funding
Seed funding is generally the initial funding raised provided by the entrepreneur and close associates to start-up or a new business. The seed funding phase represents the first official equity funding stage when the business is merely an idea. With initial seed funding, many entrepreneurs get enough financial support to get the business off the ground or prepare a detailed and attractive business plan to pitch to investors (including venture capital companies).
2. Series A Funding
Series A funding represents the next phase of raising capital, when a business establishes a successful track record in the market and achieves certain industry standard KPIs, such as revenue generation, customer acquisition, and acquiring unique intellectual property. After acquiring seed funding, a business can move to Series A funding when additional capital is needed. A business lawyer with relevant expertise can guide you in the fund acquisition process.
3. Series B Funding
Series B funding is specifically reserved for businesses that have successfully completed the development phase and are on their way to becoming an industry phenomenon. You can consider Series B funding to scale your start-up. Moreover, Series B funding is specifically vital to accomplish market dominance, and hiring the correct talent and assets acquisition to become a prominent market player. Finally, Series B funding may involve multiple investors.
4. Series C Funding
Businesses that are already successful can apply for Series C Funding. This round of capital acquisition is about taking the company to the next level, with an IPO often a primary goal. At this point in the lifecycle, a business requires additional financing support to make acquisitions, as well as to design and launch new products/services or enter unexplored markets.
What legal documents do you need during the scale-up
When you launch or establish a business, you need to have a certain set of key legal documents to make your company legally valid. Moreover, the similar documents are essential during the expansion.
Common key legal documents include client and customer agreements, legal terms and conditions for fundamental business operations, delivery partner agreements, supplier contracts, leases for business premises, and equipment leasing contracts.
It is crucial to review your existing legal business documents before and during expansion. A corporate lawyer in Australia can review your legal documents and help you understand the best future direction for your business (in legal terms). In addition, you can easily identify missing pieces and strengthen your operational structure.
Upscaling your business can be an effective strategy to succeed in the industry. However, the expansion process involves several complexities in both operational and legal domains. Therefore, it is recommended that you hire professional legal consultants to help you succeed in the process and get an edge over your competitors.