5 Mistakes That Can Kill Your Scale Up

In 20 years of running companies and advising others as a coach, I’ve come across the same issues that plague growing businesses and prevent them from successfully scaling up.

As entrepreneurs, we make the mistake of letting these issues grow until they’ve crippled our companies. That's why it's so important that we spot them early on and address them as needed.

These are the top 5 mistakes I see impairing scale ups today.

1) Lack of communication

The number one mistake that I’ve seen affect companies is a breakdown in communication. Bigger teams mean more people and more lines of communication to keep track of. 

The solution is a daily huddle – a quick stand-up meeting first thing in the morning to ensure everyone is clear of his or her goals for the day. Keep this 10 to 15-minute meeting time on everyone’s schedule, so that you know all employees will be available.

It is important to see these meetings as a tool to make decisions and not as events.

2) Lack of cash

For so many startup and scale up companies, the biggest problem is that they simply do not having enough cash. When you're constantly scrambling to survive, performance in other areas of potential growth suffers.

I know the pain of sleepless nights worrying about making payroll for the next month. The burden of this stress is something that many entrepreneurs unfortunately can relate to. To help with this, you should focus on getting money from your customers, as soon as possible! How can your business get cash from customers? Use models such as a subscription or annual membership. You can also offer discounts for bulk orders or advance payment of a year’s fees.

3) Inability to let go and delegate

After you’ve spent so much time and resources growing your “baby”, it’s hard to let go of responsibilities and delegate work to other employees. As an entrepreneur, it’s easy to feel that you’re the best person for every job -- but you can’t do it all. You need to hire the right people and you need to let them do their job.

When you let your team take full ownership of their own work, you will see them grow into an organization that can operate successfully without you. Better yet, this will give you time to focus on actually growing the business, instead of working within it.

4) Failure to hire the Right Talent

As you grow, you will need to hire a lot of new employees. But hiring the wrong employee is the ultimate way to waste cash and resources. The wrong hire at a managerial level can cost up to 15x the employee’s annual salary! Firing these employees is also extremely painful.

To ensure you're taking all the right steps in acquiring talent, I highly recommend turning to Brad Smart's Topgrading methodology for hiring. This 12-step methodology is a great way to filter through all candidates and only hire the A Players who will drive growth in the company. Each step is a practical thing you can do to filter out anyone but the right fit.

5) The wrong strategy

The last issue, that can strike your company, is a weak strategy. If you find that your revenues are not growing as quickly as you’d like -- or perhaps they’re growing, but your margins are shrinking, this is an indication that you’re in trouble and it’s time to rethink your strategy.

For this one, I recommend using Verne Harnish's 7 Strata of Strategy tool, which can help you think through your strategy and ensure you stay on the right track.

Wrapping Up

If you allow these mistakes to grow in your company, it will become very hard to scale up. Although the work it takes to properly address them seems complex and time-consuming, it will save you a lot of stress in the long-run. Implement these processes and methodologies now, so you're not stuck putting out fires for the next several years.

Is there anything I missed? What mistakes would you especially avoid making for your growing company?