Scaling Your Business – Identify and Meet the Challenges
There is often plenty of help and advice available for start-ups, but for businesses that have entered a ‘scale-up’ phase of rapid growth, success can bring a new set of challenges.
If you have ambitions for your business to achieve scale, there are a number of key areas that raise unique challenges, and which may require different approaches to the strategies that worked in your start-up phase.
Hiring the right people
In the early days each member that joins your small, tight-knit team is heavily scrutinised because their impact on the whole business is so great. But as you grow, the dynamics of recruitment change and it is easier for people less well-suited to your company culture to slip through the hiring net.
You will increasingly require specialists and middle-managers, and you will need to plan ahead, thinking across the business to achieve the right balance. For example, hiring a team of expert salespeople will only cause problems if you haven’t got the warehouse equally well-staffed and managed.
Having a long-term plan and investing in a proper recruitment process are crucial to help you find the right people, and avoid “knee-jerk” hiring to fix short term issues in problem areas.
Finance and cashflow
When it comes to funding, the level and sources available are likely to be very different to the ones you used to start the business. Whether you choose to raise funds by taking on debt (and the associated pressures of meeting repayment demands) or releasing equity (and thereby possibly relinquishing full control), this is a complex matter that will require careful thought and professional advice.
Scaling up can also be very cash-consuming, and as you deal with bigger customers, suppliers and volumes you could be handling very different credit limits and cashflow challenges, meaning the business models you used in the start-up phase no longer apply.
Systems and IT
Having the right IT systems in place is essential, otherwise an increase in orders can quickly become a major headache. As a business owner, you will also find it much harder to keep track of how the business is doing than you did in the early stages and you will increasingly rely on good data and management information systems.
Sales and marketing
As you scale upwards you may find that your focus has to move away from straightforward sales and order-taking and towards indirect marketing and promotional activities, geared towards educating your customers and building your brand.
Vision and leadership
In a scale-up phase you may need to delegate a great deal of the day-to-day running of the business. As well as the additional time pressures, it is essential that you have the energy to maintain the business’s values and culture, and the flexibility to seize new opportunities.
If you’d like to talk about any aspect of growing your business, please contact us.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.