“Don’t worry about failure; you only have to be right once.” – Drew Houston
Everyone dreams of growing their business into something great, but three-quarters of startups fail because they try to expand too quickly.
So, if you are wondering how to scale a business the right way and make sure your company is ready for the big push our tips for scaling a business are exactly what you’ve been looking for.
In this article, we’ll talk about how to scale a business by:
- Not going broke
- Cutting costs
- Targeting your sales
- Building the right team
- Taking yourself out of the picture
Feeling excited? Let’s get started!
1. Set Aside Enough Cash
Do you have enough money to fund your grand expansion? Remember that your business won’t be profitable for the six months or a year or however long you expect to focus on scaling up. Do you have enough money in the bank to cover costs, pay salaries, etc? If not, you will need to seek out another source of funding to tide you over.
2. Be Ruthless With Your Outgoings
When you’re tiny, an extra $10 here or there is negligible. It doesn’t matter too much if you overspend on a Facebook ad campaign by a few dollars, or if a supplier isn’t giving you quite the best deal. As you grow, this multiplies. Suddenly, taking a small hit on each Instagram marketing campaign can mean an overall loss of $10,000.
That means you need to get a handle on these outgoings before you scale. Take the time to manage budgets and ensure that you’re being smart with your money. Where possible, use free tools to run marketing campaigns (including emails!), project management and so on.
3. Automate Wherever You Can
It’s not just your investments of money that grow exponentially as you scale – it’s investments of time, too. Right now, it might not bother you that it takes 25 minutes to manually put together an invoice, an hour to organize payroll, a few minutes here and there to dig out a document and send it to a colleague. As you grow, however, this isn’t sustainable.
Take the time before you scale to streamline all your processes. Set up simple, cloud-hosted systems for bill payment, invoicing and accounting, online storage and collaboration on documents… even simple training and onboarding processes for new hires. Doing it properly now, once, will save you the equivalent of months of work down the line. You can start saving time by using these online tools for growing businesses.
4. Focus On Core Users
Do you have a clear idea of who buys your products or services, and why? In the early days, you’re probably just grateful that someone’s giving you money, but as you prepare to scale, you really need to know who to target your marketing and sales drives.
Misdirecting your energy will prove very expensive and potentially disastrous, so make sure you’ve analyzed your current customer base extensively, and use this to shape your marketing campaigns as you grow.
5. Hire People With the Right Mindset
Flourishing in a growing startup takes a certain type of personality. You can be amazing at the core tasks of your job and yet be miserable or unsuccessful in that kind of environment.
As you hire, make sure the people you choose are a good fit. For example, you’re going to need people who like being in a small team where they’re constantly taking on roles outside of their normal comfort zone and, well, winging it. For certain people, this controlled chaos is exciting and rewarding. For others, they’ll be on the brink of a nervous breakdown the whole time or will need constant hand-holding to get them through.
There’s no point in forcing a square peg into a round hole here. Respect that people are built differently and hire accordingly.
6. Make Yourself Redundant (Sort Of)
Would your company struggle to survive without you? Do your customers see you and the business as the same entity? Would things implode if you disappeared for a month?
If the answer to these questions is ‘yes’, you may not be ready for serious expansion. After all, you can scale up a department or a budget, but you can’t scale yourself. While it’s incredibly hard to loosen your grip on the helm, if you’re serious about scaling, you’ll need to restructure things so that the whole thing could still function if you were replaced tomorrow. Until then, it just won’t work.
Silicon Valley-style mega growth isn’t for everyone. Yes, you want your venture to be a success, but consider carefully whether you’re the kind of person who wants to build a strong business they’re emotionally invested in, carefully and over time, or the kind of person who wants their startup to explode into mega-stardom in a matter of months, but could burn out just as quickly.
Yes, you’ll probably want to scale up your business at some stage, but whether you do that in a way that’s fast and volatile with potentially huge returns or slowly and reliably with more gradual returns is completely up to you, your appetite for risk, and the kind of person you are. Either way, make sure you know how to scale a business the smart way before you focus on growing it!