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As a business owner, you’ve been thinking about growing your business since the beginning—how to keep up with your initial growth as a startup, how to continue growing beyond the startup phase to achieve your goals, and maybe even how to grow a small business into a large business—but how much have you considered scaling the business?
For most organizations, business scaling is a transitional phase that occurs after the early startup stage and before the business’s continued growth stages. Successful startups engage this phase strategically, distinguishing decisions that help you scale vs grow.
Growing vs Scaling the Business
Growing the business is about increasing revenue and resources—often at a proportional or near proportional rate. For example, an online clothing merchandiser might see a $5,000 increase in sales after expanding its online presence, and it will invest that $5,000 into growing the business through a product expansion, additional staff, or more comprehensive marketing strategies—resources that will, in turn, generate more revenue and continue the cycle of growth.
Where growth involves a steady, incremental increase in both resources and revenue, scaling the business results in an exponential increase in revenue, but involves just an incremental increase in resources.
That same clothing vendor, for example, might leverage their online success to initiate a social media influencer campaign, gain massive visibility, and incur a rapid surge in revenue, while spending just enough resources to support the expanding operations, such as upgrading its website to handle higher traffic and sales volume. The revenue generated from the massive, rapid growth allows the business to keep resource allocation small while still funding expansions.
Of course, this is no small feat: scaling the business successfully requires a strategic balance between revenue generation, resource management, and cost cutting that relies on readiness and precise timing. If you’re considering scaling the business, it’s important to carefully consider the challenges involved in rapid expansion so you can determine if you’re ready to capitalize on opportunities, without succumbing to the risks.
Challenges in Scaling the Business
Scaling the business will always be met with some degree of challenge, but while some challenges cause mere growing pains, some are fatal to your business. As a business owner, you’ve likely been warned of rapid growth from every direction, hearing horror stories of the many businesses who fell to this crucial mistake.
The problem is not the rapid growth, of course, but rapid growth when your business is ill-prepared to handle it. To determine if you’re ready to take on the rapid growth that is scaling the business, make sure you’re not positioned to fall to any of these common missteps.
Your internal processes aren’t scalable.
Don’t be fooled by a scalable product or service: even if your offering was practically built to scale, that doesn’t mean your business is. Without scalable processes and efficient internal systems, you won’t be able to keep up with the success of your business.
Consider again that online clothing merchandiser. Prior to the massive influx of orders through their influencer campaign, customer inquiries were probably few and far between, and being so simple to manage, they may not have a process in place for streamlining large-scale order fulfillment.
Without a streamlined process, response times could slow down or lose quality, leading to frustrated customers, reputation damage, and lost business, which at such a precarious growth stage, they may struggle to recover from.
To equip your team to navigate growth challenges, it’s crucial that you take the time to anticipate possible outcomes and strategize pathways for success. This could involve streamlining workflows, implementing automated systems, and establishing clear protocols for handling increased volumes to ensure the consistency and efficiency that are the baseline for successfully scaling the business.
You didn’t account for the inherent startup benefits you could lose.
As your business is in the startup phase, you have a unique edge—you can swiftly adapt to changes, ensure top-notch quality, and build a tight-knit team culture. However, as you scale up, these strengths can slip away if you’re not mindful.
The nimbleness that comes with a smaller team can give way to bureaucracy and slower decision-making processes as more layers of management are introduced. The personal touch and hands-on approach that you were able to provide to every aspect of your business might become diluted as the organization grows.
Additionally, the camaraderie and shared sense of purpose that often define startup environments can be challenging to maintain in larger teams, leading to potential cultural shifts.
To prevent these losses, it’s crucial to take intentional measures to cultivate a good company culture. This can mean facilitating open communication, capitalizing on your team’s individual strengths, and redefining the way information is shared.
You are too closely tied to everything in the business.
If you’re hesitant to delegate important tasks—you worry that if someone takes over this thing, they won’t do it quite right or if they make that decision, it won’t be the right one—you’re not alone.
As a small business owner, it’s all too easy to forget that you are in fact a business owner and not a professional contractor. This common founder mindset is at the heart of so many other issues and the reason why many scaleups fail. You have to stop being the best person for the job and start training and trusting new best people for the job—a transition that becomes particularly urgent as you’re scaling the business.
When your team is small and everyone is closely connected, you can get away with being the touchpoint and access center for all essential information, while still managing a decent flow. However, as you start scaling the business, everything grows in quantity and complexity, and it’s no longer feasible to handle or even have a foot in everything. And if you insist on it, you will reach and exceed your personal limit quickly, things will start falling through the cracks, and your team will not be equipped to support you.
As you expand—and especially as you’re scaling the business—you must decentralize knowledge and create effective channels for sharing information that allow each team member to access the knowledge they need to perform their roles effectively.
As the need grows for more of your team to take on important roles, this is crucial for empowering employees to make informed decisions, take ownership of their responsibilities, and more swiftly and effectively engage collective problem solving.
How to Prepare for Scaling the Business: The Role of Process Management
There’s a tendency among startups and scaleups alike to dismiss process management as a burden of larger, more developed organizations and as nothing more than a waste of time for their current operation.
However, what is quickly realized, especially when scaling the business, is that process management is the foundation that growth builds on. Without it, there is either a very low threshold for growth or a point of instant capsizing.
Scaling up is a complex science, and learning how to scale a business from start to finish will take a great deal of strategic planning on your part. But to set the stage for a successful scaling venture and position yourself far ahead of those neglecting this pillar of scalability, you can start right now by initiating process management—by strategically developing, standardizing, and sustaining processes using tools like process maps and SOPs.
Defining business processes sets the stage for internal scalability.
By taking the time to define and document your business processes early on, you lay the groundwork for scalability by empowering your team to strategically accommodate rather than unintentionally react to growth. By thoroughly analyzing each step of your business operations and developing streamlined workflows that consider every eventuality, you enable your business to handle higher volumes and more complex challenges without sacrificing quality.
As your business expands, even simple, repetitive tasks can quickly become overwhelming and pose substantial risk to your business. By standardizing these kinds of operations with SOPs right now, you establish consistency, reduce the compounding risk of error, and optimize efficiency.
As shareable, team-oriented resources, SOPs ensure that every individual on your team is operating from the same clearly defined standards, so that you can readily meet higher demands with substantially less room for confusion and mistakes.
SOPs help maintain agility, high quality, and good company culture.
SOPs provide a structured framework for maintaining consistency while allowing for strategic flexibility, individual innovation, and creative collaboration.
By codifying best practices and benchmarks, SOPs ensure that even as your business grows and changes, your team is equipped with the knowledge and context they need to respond to new challenges swiftly, while maintaining the quality standards that came naturally as a small operation.
As living documents that facilitate feedback and reflect your team’s collective process improvements, SOPs help to ensure that even as you grow, your team remains individually and collaboratively engaged through a system of knowledge sharing and continuous improvements.
Well-crafted SOPs enhance your business’s resilience during scaling by ensuring that the agility, high quality, and company culture which underpinned your startup’s success continue to support your growth.
SOPs are the framework for effective delegation & outsourcing.
Whether delegating to new team members or outsourcing to a virtual assistant, SOPs set the stage for smooth delegation. As scaling the business demands more labor and expanded capabilities, SOPs ensure that you’re ready to effectively delegate projects without having to invest time that you don’t have to train new employees or outsourcing partners.
Plus, by getting in the habit of delegating and collaborating with your employees, you cultivate a stronger, more engaged team that is already equipped with the resources to handle new and expanding workloads that come with scaling the business.
