You have your startup and it is really starting to grow. Now the question is how do you scale a business? If you scale too slowly, you may lose out on an opportunity. If you scale too quickly, you might run out of revenue and weigh your company down rather than speeding it up. So what do you do?
Lock down processes
For a company to scale outward, the processes of how the company works need to be reproducible. Think of this in terms of franchises. Why is a fast food chain successful? Because when new franchise owners start their own restaurant there is a repeatable process, or formula, that corporate has determined works. This process has been honed, focused, and refined to the point where all the franchise owner has to do is follow it. From there, the fast food chain can be scaled outward.
Automate what you can, outsource what you can’t
Wherever possible, the company should be automated. This means that when a customer orders a product, there’s a fulfillment and shipping process that is initiated automatically and sends the product to the customer. By having this process happen automatically, there’s no worry about human error or someone dropping the ball and forgetting to check on orders and send it out.
When a task can’t be automated, consider whether it’s something that can be outsourced. This is especially important for small companies that are still establishing their business. Outsourced tasks might include legal, IT, HR, and accounting. Have the employees you hire focus on your core business and everything else handled by other individuals and companies.
Work on your business, not in it
As your company builds steam, take yourself out of the critical path of the company’s day-to-day operations. There are plenty of capable people who you’ve hired to deal with things like revenue streams, marketing channels, and burn rates. Your job as the company owner is to see the big picture. While they’re in the trenches keeping everything running, you need to be able to see where the gaps are and where the opportunities lie.
It’s also essential for you to take some time away from your company. This is a hard thing to do for most entrepreneurs because their business is their baby, and they may feel it can’t function without them. Taking some time off where you can decompress, relax, and focus on things other than your business is a great way to become rejuvenated. When you come back you’ll be more excited than ever to get going, with fresh new perspectives and ideas.
At the same time, your employees will feel empowered. They will feel that they can take the business you’ve built and help it to be successful without you watching to make sure there are no missteps.
Hire smart, not fast
Too many businesses are conservative in their hiring. They don’t want to hire people unless they know for sure they need more. The problem with that is when they do need people they need them yesterday. Because they did not give themselves time to search for the perfect candidate, they end up hiring frantically. In other words, managers end up bringing people on that might not be a great fit for the company or that don’t have the right experience simply because that’s who was available at the time.
So hire in advance. See what’s coming down the road and plan for it before you’re there. Take the time to really find the right people with the right experience and the right vision for the position. Then once they’re hired, trust that they know what they’re doing.
If you need to, slow down
Don’t feel like your business needs to go full steam ahead or else you’ll risk losing your momentum. Sometimes going full speed can mean failing to notice the bridge is out ahead and driving right off a cliff. In other words, you can miss crucial details that can derail your entire business. Even Larry Page, Google’s CEO, has to slow down from time to time. Back in 2002, he got in trouble with investors because they didn’t feel he was hiring fast enough but, to go along with the previous point, he was slowing down to make sure he hired the right people.
As a business owner, sometimes you need to slow down so you don’t become a dog chasing its tail. Make sure you’re not just busy to be busy, but busy at what needs to be accomplished. It might appear that you’re being inactive, but really you’re just slowing down, looking at the map, checking your compass, and then moving forward in the right direction.
Sing the wrong note as loud as you can
Too often people are worried about making a mistake. Unless your business deals with dire consequences if someone is wrong, create a corporate culture that embraces mistakes. When a choir is learning to sing a new song, it’s better for a choir member to sing the wrong note than not sing at all. That way, the choir director can help that person fix the note. In the end, it will lead to a better performance, as well as stronger individual growth.
The same can apply to your business. Don’t come down hard on someone who makes a mistake. Use it as a learning experience and applaud them for being willing to try something to see if it would work. Support the idea of innovation at all levels.
The difficulties of scaling a company
Scaling a company can get tricky. The main thing to keep in mind is that you need to keep your customers happy. If you treat customers well, they’ll forgive most minor issues. If you ignore customers, are rude in your interaction, or are unable to help them with their inquiries, then customers will have poor experiences. In today’s era of social media, it doesn’t take long for customers to report negative company experiences across Twitter, Facebook, and review sites.
Is scaling up keeping you down?
Let’s consider a company that has not been in business too long. Forming around summer 2016, this business has experienced tremendous growth. Their platform? An employee-owned company producing high quality memory foam mattresses that are sold directly to the customers through the company’s website.
Obviously their marketing department is in full swing because customers started buying the mattresses in droves. Orders were flying in and in March 2017, the company found that they couldn’t meet with the demand. It was such an issue that customers were actually cancelling their orders and calling the company a scam, claiming that the company took their money but didn’t provide a product. Some were waiting as much as six weeks for their mattress to arrive, despite being told they would receive their mattress within a week of ordering.
On top of that, the customer service representatives were slow to respond to customer queries via email, and when customers called the phone number or used the chat feature on the website, they found that the customer care rep on the other line did not have any information on the status of their order.
The company tried to smooth things over by offering free pillows with the purchase of a mattress. That didn’t help much since when many customers finally received their mattress in the mail, it was without the pillows they had been promised. Luckily for the company, many customers loved the mattresses and felt they were totally worth the wait. However, this did little to stop the disaster caused by this scaling problem.
In the end, they didn’t have their manufacturing process scaled to accommodate the number of buyers. Rather than being realistic about the volume they could handle and either not taking more orders until they had stock in hand or being realistic with customers on when they could provide the product, the company kept moving forward on a hope and prayer that everything would work out and that they wouldn’t alienate their newfound customers.
Don’t fall victim to scaling blunders. Make sure your processes are automated and that they scale, you have systems that track everything, and you treat your customers right. If you do, you’ll scale successfully, leading to a successful future.