Tips to Successfully Scaling Your Startup
Getting Ready to Scale Your Startup
Founders have no shortage of advice when looking for ways to find a foothold in their industry & lay a strong foundation for their new business. However, with enough time and energy, it ceases being a new business, and that sometimes means scaling your startup into something bigger.
Scaling up can be a scary and sometimes fateful decision for your company. Whenever you scale your startup hastily, and without a proper plan, you are bound to make organizational blunders that could stick with you for the long haul, causing business issues down the road.
Sadly some businesses have collapsed after their efforts to scale the business failed, whether due to poor planning or trying to grow too quickly. On the other side of that coin, delaying the scaling process for your business could result in losing perfect opportunities that could boost your business’ revenue.
Are you currently planning the next chapter of your company's growth? Keeping these tips in mind to guarantee you’re planning for scaling wisely:
Assess & Establish Whether your Business is Scalable
Having a fantastic product that meets the needs of your customers doesn't necessarily give you the green light to scale up your business. Assess honestly what you are offering to the market. And if scaling up would put too much of a strain on the business resources, maybe maintaining a lean, sustainable structure could keep the business small, yet successful.
"Investors or a highly scalable business may not be necessary or vital for everyone. Today, family businesses make up about 90% of all small businesses, which are often small by structure, fulfilling, and successful. It is a tactical decision," notes Martin Zwilling, a Forbes columnist, in "10 Tips For Building The Most Scalable Startup."
Pinpoint Your "Core"
Identifying your main products, consumers, and marketing strategies is crucial as it helps you make sound decisions before scaling to the next level. If you’re doubting that, there is factual data to support that claim: research done by The Startup Genome in 2011, involving over 3,200 startups, indicated that 74% failed because they attempted to scale up too soon.
In "7 Ways to Prepare Your Startup to Scale Up" by Neil Patel, an author and startup expert, you'll find a quick checklist through which you can read and get to know how to you can identify your core before attempting to scale up your business:
Have you got a minimum workable product and established a product-market match?
Who are your main customers?
What market strategies promise the best ROI?
Are you able to secure sufficient funding to keep your business afloat whenever it goes through a rough patch of being unprofitable?
If the answer to any of these questions was "no," you simply need to slow down and get back to the drawing board. You don't want to be among the 74%.
Embrace Automation and Outsourcing
For any aspect of your startup that is labor-intensive, Zwilling suggests that you may not scale as effectively as possible. It is, therefore, important that you find a strategy to streamline your various operations. This could mean automating billing and payroll, making training videos to help new hires acclimatize and settle quickly, and even looking for ways to automate the business's marketing process.
In situation where automation might not be applicable or feasible, be open to outsourcing some of your business operations. Remember, most of your resources should go into enabling the functioning of your core offering, at scale. As such, it is only the truly crucial roles that should stay in-house. Tasks like design, copywriting, cleaning, and legal services can pretty easily be handed to external contractors. Afterward, you might consider bringing back these auxiliary tasks to the organization once you are comfortable at scale.
Make Your Business Functional Without You
Your operations need to be so streamlined that you don't have to be around to manage the business, or someone else could comfortably run the business. The operations must be easy to understand and reproduce. It would be detrimental if your operations were so fragile that no junior employee was able to handle them in your absence.
"You would be mistaken to presume that hired sales or marketing personnel can go on to reproduce the kind of success that exceptionally inspired, strong, and compelling founding members did in the beginning. Without a doubt, this is hardly true," writes Fred Destin, a venture capitalist, in "Scaling-Up Without Screwing Up: 7 Tips On How To Scale."
Don't Overdo Things in the Main Areas
Fred Destin identifies the three sticking points that you should exercise discipline while scaling your startup: recruiting, building, and expenses. Here's the reason:
Recruiting
Keep in mind that staying lean is crucial to the scaling process. Avoid hiring unnecessarily many middle managers and specialists. By taking away your core competencies, these employees leave you exposed by attempting to scale hastily.
Expenses
It is common for most startups to splash their cash, especially after they have raised more than enough through investment rounds & fundraising. If you decide scaling is right for your business, all of your financial decision should be aimed in the direction of growing the business.
Building
After your product has reached parity with market demand, and you’ve begun the scaling process, don't lose focus & get tempted to change features or suddenly expand your product line. Focus on being the absolute best at doing at least one thing before bringing new products to market.
What You Need to Keep In Mind
Scalability is all about having a framework built for smooth growth. Here are a few things to ponder as you get ready to scale up your startup.
consider automation & outsourcing, especially for any jobs that aren’t directly connected to your business core.
Exercise financial discipline. Avoid investing in new growth until you know you’re ready, or it is absolutely necessary.
if your Business or industry is nudging you toward staying lean & focusing on your current customer base, it’s perfectly fine not to scale your business.