A scalable business can adapt to a more substantial workload without compromising performance or losing revenue. When it comes to start-ups, scaling is the key indicator of success; as a consequence, a lot of start-ups aim to grow quickly.
But, how do you know if the time is right to scale your own company? Some start-ups take off without the right people, systems, or mindset in place. However, scaling too impulsively can lead to poorly-planned expansion, a damaged customer experience, poor hiring choices and often failure. According to the StartupGenom’s survey of 3200+ startups, 74% of failures stem from premature scaling.
Before you decide to grow sky-high as quickly as possible, make sure you have the basics in place:
1) Your core product line has achieved market/product fit
Confirm that there is sufficient demand within your target market to justify further spend necessary to scale. Implement a business model that will allow you to acquire new customers at a profit, while still delivering superior value. If you are getting new customers with little or no marketing through word of mouth, and your conversion rates are high, you may be ready to grow.
2) Do you have the resources to scale?
A key decision when scaling up will be how to finance the expansion of your business. You shouldn’t worry about profitability while scaling, and the last thing you want is to run out of money. You might need to seek an additional round of funding if necessary. Explore the types of funding like traditional bank loans, angel investors, crowd-funding, etc. If you aren’t sure which option is the best for you, get professional advice. Consider expert advice as a worthwhile investment. Imagine your losses if your scale up doesn’t work out.
3) Make sure you outsourced non-essentials
Start-ups often don’t have the luxury of hiring in-house developers, graphic designers, SEO experts or lawyers like large corporations do.
If you are in such position, consider outsourcing your non-core roles, so that you can focus on what you are good at. When you’re nailing it with your core competencies, you’ll start to scale up.
4) Have you hired the right people?
Hire only the people that are fundamental to your operation (outsource the rest). You need people on your team who:
– Can do what machines can’t. Automate everything you possibly can to maximise the team’s efforts.
– Are multiskilled
– Are full of good ideas
5) Have your automation in place
Spend some time setting up:
– Training for new hires
– Payroll for rapid processing
– Bill-pay for automatic withdrawals
– Cloud storage
– Marketing automation
Even though it initially seems time-consuming, this exercise will pay for itself in the long term. You’ll be able to hire and train faster, access data quicker, pay easier, streamline operations, and market more efficiently, for a truly scalable model.
After successfully establishing your start-up, after a few years, you might feel it’s time to scale. Don’t let the pressure from your investors and other entrepreneurs get to you. It’s important to stop and evaluate if you have the right people, processes and plan in place first.