5 things a Startup Founders should do to effectively scale up their business.

So you’ve made the decision to grow your business – congratulations!

Now get ready for the next challenge: how to scale your business for growth. Even if you manage to sell like crazy, you’ll soon have another problem: you have to be able to deliver to all those new customers.

Scalability is about capacity and capability.

Does your business have the capacity to grow?

Will your business systems, infrastructure and team be able to accommodate growth?

If growth causes your company to stumble because of confusion, orders falling through the cracks, insufficient staff, miscommunication, not enough manufacturing or delivery capacity –you’re going to have unhappy customers. The manual processes that were fine when you were small but now won’t let you move fast enough. You’ll either be putting out fires or desperately trying to keep your head above water. All of which is stressful.

Scaling a business means setting the stage to enable and support growth in your company. It means having the ability to grow without being hampered. It requires planning, some funding and the right systems, staff, processes, technology and partners. 

5 critical steps to scaling your business

Evaluate and Plan

Take a hard look inside your business to see if you are ready for growth. You can’t know what to do differently unless you take stock of where your business stands today.

Strategize what you need to do to increase sales.

Then assume your orders doubled or tripled overnight. Does your organization have the people and systems to handle those new orders, without failing or getting a big black eye? This is where a good plan is essential.

The best planning in my view starts with a detailed sales growth forecast, broken down by number of new customers, orders and revenue you want to generate. Include a spreadsheet that breaks the numbers down by month. The more specific you are, the more realistic your sales acquisition plan can be.

Then do a similar expense forecast, based on adding technology, people, infrastructure and systems to handle all those new sales orders. Look at every item on your current P&L to see how it might be impacted. Expenses will go up -- you have to anticipate where and how. Again, include an expense spreadsheet that breaks down expenses needed to meet your sales forecast.

Try to think of everything.

You’ll need to do some hard thinking and research to come up with proper cost estimates, but doing so will make your plan better.

Find the Money

Scaling a business doesn’t come free.

Your growth plan may call for hiring staff, deploying new technology, adding equipment and facilities, and creating reporting systems to measure and manage results. How will you find the money to invest for growth? 

I’m a huge proponent of bootstrapping, but it typically takes years to grow through bootstrapping alone. It’s also helpful to identify potential bank funds to accelerate growth such as a loan or a line of credit to draw on – start with how much you’ll need. And get started applying.

Secure the Sales

Scaling your business obviously assumes you will sell more.

Do you have the sales structure in place to generate more sales? 

Look at sales from end to end. Do you have:

• A sufficient lead flow to generate the desired number of leads?
• Marketing systems to track and manage leads?
• Enough sales representatives to follow up and close leads?
• A robust system to manage sales orders?
• A billing system and a receivables function to follow up to ensure invoices are collected timely?

Invest in Technology

Technology makes it easier and less expensive to scale a business. You can gain huge economies of scale and more throughput, with less labor, if you invest wisely in technology. 

• Automation can help you run your business at lower cost and more efficiently by minimizing manual work. 
• Systems integration is a prime area for improvement in most businesses. Companies today don’t run off of a single system -- they may have a dozen or more systems. If those systems don’t work together, they create silos, which in turn multiply communication and management problems as your company grows.

Now’s a good time to evaluate new products on the market that save time and money, yet accommodate much higher volumes in every part of your business. Look at CRM, marketing automation, sales management, inventory, manufacturing, accounting, HR, shipping and other technology systems. 

Evaluate not only software, but also networks and hardware such as servers, computers, printers and telephony equipment.

Find Staff or Strategically Outsource

Last but certainly not least, are the hands needed to carry out the work. Technology gives huge leverage, but at the end of the day you still need people. 

• Do you have enough customer service staff? Look at industry benchmarks to determine a rule of thumb for how many customers one service rep can be expected to handle.
• What about the people who are responsible for your manufacturing, inventory and delivery of product or services? How many are typical for your industry per customer, and how many will you need? 
• How do you find qualified help quickly? Recruiting and hiring systems are important, as are benefits and payroll.
• Don’t forget management. The importance of a management bench grows as your business grows. You won’t be able to oversee everything.

Sometimes the answer is to outsource or look to partners, rather than hire internally.

Scaling requires that you make tough choices.

What functions can and should you perform -- or not perform -- internally?

Third parties may have the staff and investment in systems that enable them to be much more efficient in handling a function than your company. Trying to replicate that function internally may take too much time or money. Instead, find a reliable partner to outsource, thus positioning your business to scale better, faster and cheaper.

For the past 5+ years, I’ve coached 100s of small business owners on how to grow their companies. During that time, I have personally observed the common patterns that keep business owners stuck in the “work until you drop” model. 

4 Common barriers that hold small business owners back from scaling their fledgling companies. 

As you read this list, take a hard look at your own company, and see which of these barriers is costing you.

Barrier 1: “The Stacked Deck”

Most business owners have to work the way they’ve structured their business. They charge too little, relative to their real costs. Since in most cases they are their company’s primary sales person, customers expect them to personally be involved in fulfilling their product or service or, at the very least, actively overseeing its production or fulfillment.

Their businesses have become a treadmill!

What’s worse is that the more you work, the more your business comes to rely on your personal production. And with increased sales, you take on more overhead, which in turns locks you in to needing to personally produce more. Is it any wonder that it’s so hard to imagine scaling your company? After all, you say, you simply don’t have more hours to work. 

Barrier 2: “The Competency Trap”

I get it – you are very good at what you do, perhaps even the most competent person in your company. But now, that very competency works against you in the context of scaling your business. You’re so darn competent that it’s hard to let other people handle tasks that you know you can perform better. You may very well find it excruciating to watch a member of your staff complete something subpar to your expectations. You may feel constantly compelled to step in and handle any and every little job in order to make sure it’s executed properly.

But the more you do, the more you have to keep doing. This leads directly into the next barrier…

Barrier 3: “Controlitis”

Controlitis is the inflammation of your control gland—and I understand this one.

I’m a control freak myself who runs three active firms. But I’ve trained myself to laugh when I hear myself say, “If you want something done right, you’ve got to do it yourself.” Recognize that these just might be the most expensive words that any business owner can say.

You’re good at what you do, I get it!

But recognize the high price you are paying for your urge to control every detail of your business. I’m not going to tell you to just abdicate responsibility, but rather, to build on a stable base of sound business systems, a talented and well-trained team, and a culture that helps ensure proper handling of any situation. This base is critical if you want to scale, and scaling requires you to grow your ability to intelligently delegate functional responsibility (not just handing off tasks to be done.)

Barrier 4: “Lack of Business Training”

This is another way that the deck is stacked against you. In all your years of running your company, you’ve likely had very little formal training on the skills to run a business. You’ve had to pick things up on the fly. You learned to read your financials, sell your product or service, hire and manage employees, budget and plan, all based on painful trial and error.

So if these are the barriers that hold you back, what can you do about them? 

Here are three simple suggestions to help move past these barriers.

1. Intentionally choose one or two functional responsibilities to delegate, and train an employee to “own” for your company. This could be training XXX to be responsible to onboard new employees; YYY to handle the crew scheduling; or ZZZ to handle all purchasing under 100,000 a month. 
2. Monitor your own language and behavior. Whenever you hear yourself saying, whether out loud or just in your own head, “No one can do this as well as me so I have to do it myself.” Or, “It’s too much hassle to get someone else to do this, I’ll just knock it out myself.” Be aware that you are firmly rooting yourself in having to work harder and harder for your business, which stunts its ability to grow and scale.
3. Read one business book each quarter. If you don’t like to read, then get the audio book, and listen to it! No excuses; one book a quarter. This is you investing in your business education.

Have you encountered any issues in scaling your business?

I have been helping businesses to scale up and manage the change right way to achieve the desired Growth Objectives. You can reach out to me if you are planning to expand your business.