Is your business idea destined to fail? It’s not a prospect most startups like to think about, but it’s a reality that more than half of businesses will face before reaching their 5-year anniversary.
To become one of the few startups that’s set for a long, prosperous future, it’s important to understand how to scale your business as needs fluctuate and manage change efficiently and effectively.
What Does It Mean to Scale?
How do you scale a business?
One of your first priorities in your startup should be to set the stage for growth. Think of it as creating a blueprint for your future success. Growing without a plan may earn you a few successes, but these high points may prove to be unsustainable, unrepeatable, and unpredictable unless you are positioned to scale.
At its very core, the ability to scale lies in this blueprint. It’s the systems and processes you build early on that will enable you to grow quickly, efficiently, and cost-effectively. This groundwork prevents tasks and duties from falling through the cracks that appear as you become larger and more in demand.
There Is No Clear Path to Scale
In its most basic form, a scaling strategy includes processes, technology, systems, staff, and strategic partners. Each of these moving parts interacts with each other to support your company’s growth. And you’ll execute the tasks in such a way that they can add a layer of predictability and failsafe to your business.
Execution is where more companies find difficulty in scaling. Scaling looks and functions differently for each business, taking into account your unique company culture, people, budget, goals, and resources. Because there is no single-best way to go about priming your company for growth, many businesses take shots in the dark about how economies of scale should look and function.
Scaling requires hard numbers and research, attentiveness to detail, and ongoing trial and error that can help you identify challenges and opportunities. In truth, it’s a significant investment of time and effort. But eliminating stumbling blocks when you’re ready and able to grow can be the difference between a successful company and a shuttered one.
Key Challenges to Address
Business growth takes careful planning.
As you’re exploring ways to scale your startup, consider the following priorities and guidelines:
Businesses can grow in one of two directions: vertically (diving deeper into a single niche) or horizontally (expanding into new markets). You’ll need to choose a course for growth, explore the pros and cons, and determine the profitability.
Secure the Funds
Scaling isn’t always cheap. You’ll need to decide which activities will help you become the most efficient and profitable, then plan for those funds in your budget. Remember, funding can come from a variety of sources, including grants, loans, and investors.
Remember Less is More
Scaling your business isn’t always about doing more. Many successful businesses find they can be more profitable by focusing only on what they do best. This helps to keep costs low and make the best use of internal resources.
Scaling can take time, and trying to do it too early can burn through your cash reserves. Take it step by step — slow and steady wins the race.