How to Scale Your Business

Last Updated on August 8, 2022 by Admin

Reading some online articles and social media think pieces, you would be forgiven for assuming that scaling and growth are interchangeable terms. They’re both vital terms for a new business to understand, to be sure – but they mean different things.

Growth is the initial period in a startup’s journey as it expands its workforce, market share, user base, and revenue. On the other hand, scaling is more of a balance – it is the second act for a business, as it attempts to continue increasing revenue while reducing principal and total costs of operation.

Harvard Business Review puts it in even simpler terms: “Growth means adding revenue at the same pace you are adding resources; scaling means adding revenue at a much greater rate than cost. “

A common question among business owners, upon learning the difference, is, “how do you scale your business?” How does a business grow sustainably without risking sinking profits or outright implosion?

With help from some experts, here are a few fundamental tips for scaling your business.

Money Matters: Courting Investors

Whether you’re in a growth stage or a scaling stage, you need money coming in from investors. Courting investors in the first couple of years of business ownership isn’t easy. Many entrepreneurs lose focus in this stage, trying to court investment from several sources without a solid strategy.

According to Regan McGee, CEO of the successfully scaled Nobul, “If you want to take your high-growth tech company from startup to successfully operating at scale, you need a highly credible lead investor.” He cautions that “without that champion, everyone else will shy away. Many VCs follow a peer they think makes good investment moves.”

The takeaway: Create and implement a strategy to impress a credible lead investor as you scale your business.

The Balancing Act: A Compact, Synergistic Team of Top-Level Talent

In the growth stage, your business adds members to keep up with increasing demand. As you scale responsibly, talent becomes a balancing act. Ideally, you want a tight team comprised of top-level talent. Everyone should fill a necessary role and work synergistically to improve the operation.

Writing for Forbes, Ron Carucci recommends the following: identifying and recruiting for the skills you need; designing roles with growth in mind; pruning and upgrading your talent as needed; and – crucially – hiring people who think differently than you. This last point is a hedge against “founder’s syndrome,” where founders maintain disproportionate and sometimes harmful influence on their company.

Running a Tight Ship: Productivity and Workflow Management

Lastly, scaling requires you to emphasize productivity and workflow optimization. Essentially, these concepts entail running your business more efficiently and effectively with your current talent. You want to shave time off tasks and money off operations – without cutting corners.

It’s a tall order. Some startups swear by workflow optimization software (there’s a ton to choose from), but, in truth, productivity and workflow boil down to good management. Take a look at this instructive New York Times article, which argues that good management doesn’t necessarily involve time management but attention management; the article makes the case that reason and emotional investment are more important in productivity than counting minutes.

Follow these simple steps to scale your business, turning a growing organization into a sustainable enterprise.