4 Things to Consider Before Scaling Your Business
People often describe kids as “growing like weeds.” Parents are no strangers to the struggle of discovering the clothes that fit their children just right last month have already become too snug. Businesses experience similar rapid spurts of growth —to find what worked well for operations a month or a year ago now confines their business like a pair of shoes a size too small.
In today’s fast-paced business world, the act of scaling is about more than just increasing profits; it’s a prerequisite to staying relevant and competing for market share by continually refining your products and services.
In other words, you’re falling behind these days if you’re not innovating.
Want to scale your business? Here are four areas worth considering before springing into action.
1. Differences Between Scaling and Growing
It’s important to differentiate between growth and scaling.
Here’s how one business strategy expert differentiates the two:
- Growth: Adding revenue, often at the same rate you’re adding cost.
- Scale: Expanding margins, or adding revenue at a greater rate than costs.
So, companies can very well keep adding clients or increasing product sales yet never scale. Why? Because scaling is more than happenstance and natural trajectory; it involves strategy and innovating the very processes by which your organization does business.
While growth and scaling both require the infrastructure to support increased operations, they take a fundamentally different approach to doing so. Growing steadily over time requires a much different mindset — and different infrastructure — than purposefully scaling to outmaneuver competitors in the same market.
Be sure your company is aiming to scale rather than to grow before you proceed. Getting these two concepts confused can lead to tension if goals start to exceed infrastructure.
2. Ensure Frameworks for Decision-Making
The nature of decision-making changes as a company expands. Whereas a handful of leaders likely started out calling the shots, businesses need a way to ensure this framework grows sustainably alongside the organization as a whole — empowering smart and innovative daily decision-making across all levels.
This helps explain why forward-thinking enterprises are aiming to become truly data-driven and giving the “average” employee easy access to information they need to take the reins.
It’s apparent now more than ever before that game-changing ideas can come from anywhere within an organization; not just from the top. It becomes even more advantageous to put data insights directly into employees’ workflows where they can ask questions, pull insights and analyze performance data anytime. This underscores the need for a scalable, self-service analytics platform capable of supporting your efforts to scale up and grow.
Your data analytics platform plays a significant role when you’re aiming to tap into new revenue streams, improve processes and streamline operational costs. You’ll need performance insights to help stakeholders make smart decisions every step of the way.
Smaller and more traditional companies may rely on a siloed, legacy approach to data analytics overseen by a centralized IT team. But companies looking to scale up need a solution capable of providing democratized data access to speedy insights for any number of users as well as using artificial intelligence to mine data for insights human analysts may have missed.
3. Defining Your Organizational Culture
If you’re not consciously shaping culture, it can easily get lost in the shuffle of scaling up. One management expert for Harvard Business Review recommends translating abstract values you want your company to embody — like “respect” — into observable behaviors employees should practice, such as “being an attentive listener” and “giving equal consideration to different ideas.”
It’s also crucial to ensure managers are reinforcing behaviors in line with your ideal organizational culture as you scale up — in addition to practicing them. Don’t just talk the talk; show employees through positive reinforcement and examples what it means to be a part of your team.
4. Hiring the Talent to Support Your Scale-Up
Hiring is a funnel, just like acquiring and retaining customers. You’ll need to strategize recruitment, interviewing, onboarding and training to lock in the “A players” capable of supporting your scale-up. New hires should demonstrate strong skills pertaining to their job roles, as well as fit into the culture you’re striving to foster. Your company should already know what onboarding will entail before the interviewing process begins — this will empower a new hire to hit the ground running on their first day.
Scaling your business is an exciting endeavor, but you’ll need a strategy to make it happen. Focusing your effort around building an agile yet sturdy infrastructure through talent, culture and data analytics will get you there.