Startup to scale-up, step by step
Starting a business isn’t easy. Yet even if you managed to succeed in doing so, many more challenges still lie ahead of you. One of the major ones that a new startup faces is the expansion challenge, or as I like to call it, the scale-up challenge. You might ask, what does ‘scale-up’ mean? Why is it important? How can you achieve it for your business? I’ll try my best to answer these questions and others based on my experience as an entrepreneur.
Scaling vs growth
You might have heard the term ‘growth’ concerning businesses, but you must understand that growth and scale-up are different concepts. Startup growth means more clients, more employees, larger offices, and higher costs growing linearly — which doesn’t necessarily go hand-in-hand with larger revenue. It happens a lot to SMEs: while expenses rise, profit might not or may even experience a downturn.
On the other hand, a scale-up means business growth is proportional to its ability to perform better and be more efficient money-wise and time-wise, therefore being able to expand exponentially. Trying to scale up ahead of time might cause your business to collapse, while lingering too long before trying to expand might cause you to miss great opportunities. It’s a delicate process.
Start with the basics
Before scaling up, you must make sure your business model has already been proven to work and applied successfully. Also, verify it has the potential to allow expansion in the future. If you can check both of these boxes, your business is ready to enter the scale-up stage.
Start with establishing ground rules to achieve your objectives and have a sense of direction. Make sure your team knows your standards and goals and lives up to them. Create a sense of urgency by setting deadlines for missions right off the bat. Examine which work methods are better and understand why they are so. Perfect the chosen work methods so you can later replicate them.
More or less?
Your start-up’s staff determines the character of your business. Therefore, it’s super important to care about your employees and how they operate it.
It would be best if you made the employees feel that completing their missions and objectives directly influences the company’s success. Create an environment where people enjoy working. When recruiting, you must make sure that recruits are aware of the companies’ mission, vision, and values right from the start, through courses and training.
I mentioned before that to grow into a successful business; some work methods must be learned and implemented. Once that becomes part of your routine, you can start automating processes with the help of information technology (IT). This will require investing money, both for implementing the strategy in the system and teaching your crew how to manage it, but in the long run, it will save you lots of time and capital.
Automated systems are especially important in start-ups that need an ever-increasing workforce. Too many employees in-office might cause your business’ scale-up to slow down or even cease entirely.
If, in some cases, automation is not an option, go for outsourcing. As a business grows, it should start delegating tasks, hiring services of other companies to do specific missions (such as design, copywriting, etc.).
Keep in mind that a business must show customer and revenue growth to scale up, but that’s not all. Increasing revenue doesn’t necessarily mean you are scaling up. The company must first have the proper infrastructure to expand.
A wide-angle observation
New businesses tend to make careless mistakes right from the beginning, creating unplanned obstacles or even leading to business failure. You can avoid making some or all of these mistakes with proper preparation, planning, monitoring, and strategic thinking. I mentioned deciding on a good business model, setting goals with deadlines, promoting employee welfare, outsourcing and automation. Yet that’s not all. I have some more important tips for you.
- Don’t imitate business models from other start-ups. Even though taking inspiration is great, there are no two identical businesses therefore copying isn’t helpful.
- Recruit only if you are certain new employees are needed for your business expansion.
- Recognize your strengths and weaknesses as a business. Ask for help if needed.
Lastly, don’t be ashamed to step back. Scaling up is a great challenge for many start-ups. If you don’t succeed in doing so, consider postponing it to learn what went wrong and how you can do it better next time. Taking a step back might also open up new opportunities for you, which you haven’t considered before. All in all, taking a step back now could mean a big step forward, not necessarily in the far future.