If you are in the process of building your business today, you are going to be thinking of scale ‘ that’s how you lay the foundations of an empire. When Mark Zuckerberg launched Facebook in 2004, it was to connect his fellow students at Harvard University with each other. As of 2021, Facebook has 2.80 billion users worldwide. That’s scale.
Scalability is the business capacity to grow by maximising the potential of resources, increased productivity, efficiency and overall performance. Without an ambition to scale up, where’s the fun in setting up the business? The journey to scale is challenging, is has its twists and turns and if not managed and planned correctly, it can cause a business to crash and burn. Importantly, one mustn’t confuse scale with growth. Scale is about increasing overall revenue without any significant increase in spending, growth is about investment ‘ spend money to make money.
Ask yourself 4 questions to decide if it is the right time to scale up.
- Are you ready for the shift (cultural, operational and financial) from start-up to scale?
- Do you see a sustained future demand for your product / service?
- Do you have a positive cashflow?
- Do you have the right team?
Once you have established that your business is ready to scaleup, consider the following 5 challenges (focused on internal challenges) and you can turn them to your advantage.
Culture and values
It’s not just about having the buzzwords and fluff ‘ if you have set-up your business, knowingly or unwittingly, there’s a culture that you have developed. This could be something small like how you communicate as a brand on social media to your approach on winning new business. This is the foundation and what makes it uniquely yours. As you scaleup, retaining the culture and values is important – it is that little touch that differentiates you beyond just the functional.
The restrictions of structure
As you scale up, you are shedding the agility of a start-up, but you have not as yet achieved the stability of a grown-up business. You may start to lose flexibility and freedom but appreciate the trade-off that happens ‘ you’re establishing structures for sustained growth. Find that delicate balance between still being nimble and the necessary processes.
Change to social systems
The corporate world can be a maze of politics, unnecessary structure / processes and conflicting values ‘ not ideal, but necessary. In the scale-up phase, you soon start appreciating the value of establishing rules and restrictions. To ensure efficiency, norms need to be standardised across your business. You cannot scale effectively without this, it’s not about being a killjoy and thwarting the personality of your company. It’s about retaining your core but building on it to ensure you are maximising the potential of the scaleup phase.
Mindset shift
Scalability required a mindset shift, you are now not just selling a product / service, you are developing and managing a system that ensures you are successfully making or delivering that product / service. That is a whole different skillset and mindset to ensure success.
The team
As a result of the above 4 challenges, invariably there will be the company ‘veterans’ who were there with you right from the start. The company that once thrived on the freedom and culture of the start-up phase suddenly isn’t exactly the same anymore and that comes with resentment from some. This is usually accompanied by a mismatch of skills and ideologies. This requires social adjustment on both sides.
Scaling up may seem like a momentous challenge, however with strategic planning it is not only doable, but also the key to significant growth.
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