Making your startup ready to scale

Zuzia Grzyb
30 May 2019

Becoming a corporate from a startup is a long journey and requires great efforts to make it happen. If you already launched your startup successfully, you have to be prepared to face the choice of whether to scale or not. You have to remember that mistakes during scaling are the number one reason why startups fail. That’s why in this article, we will try to help you make the right decisions to go through the scaling process in the best possible way.

Wait for a perfect moment and keep in mind it may never come

Some businesses simply aren’t scalable and it doesn’t mean anything wrong. They will just work better as successful small businesses. You should ask yourself if it applies to your business and it won’t always be easy to identify.  However, there are some predictors of success when it comes to scaling. First of all, predictable revenue. A company scales when its revenue increases while its operating costs remain low. If your costs increase at the same rate as revenue, you can’t call this growth scaling. Secondly, when you are satisfied with your customer retention rates it could mean it’s high time to scale. That’s why one of the most scalable products are subscription-based services.

Have solid backup on board but be ready to hire more people

After you put your idea into practice and it turns out to be a success, you reach more and more clients. This is of course what you’ve been waiting for but it is also a point when some challenges start to arise.

First of all, you have to be prepared for hiring new staff. You might have a really good team and don’t feel a need to hire more backup. But in fact, if you care about your employees and want them to stay with you, you have to. That’s also a crucial thing when you start thinking about scaling, to have a solid team already on board. You have to really be sure these are faithful people who are passionate about the idea just as you are. It will be much easier to grow with them looking forward to new challenges on board. That being said, it’s important not to let them feel too much workload and pressure.

Being ready for hiring is becoming especially important when your client base is starting to grow so fast that you’re not able to handle new clients. That should be a sign that your concept or work is attractive and you have to prevent losing business opportunities by hiring new staff.

Positive Cash Flow is essential

If you’re getting ready to scale, you have to remember that profits don’t always tell you enough about your financial capabilities. What is really necessary is positive Cash Flow. All business owners will agree how hard it sometimes is to achieve that. Obviously, everyone wants to keep cash as long as possible, but you need to care about your liquidity, especially when you’re about to scale. The scaling process results in increasing the costs of your business. And unfortunately, it usually happens before the company is able to generate additional revenue.

Probably the worst thing you can do when scaling is to overestimate your resources before the process begins. That could cause a situation when you run out of money and waste the efforts you put into growth.

Automation and outsourcing are your friends

You should really take your time while automating repeatable processes. These are things like a new employee or customer onboarding, marketing email automation and many more. Just think of a process which can be automated and you’ll find plenty of tools which might help you. Once you set them all, you will have much more time to focus on the scaling process.

Another way to free your resources is by outsourcing all non-essential tasks. This is truly an investment that pays for itself in the long run. Also, it can turn out to be much cheaper than employing another person to manage these tasks. Remember, big companies can afford to keep their professionals in-house, but while you’re still a startup it is much better to focus on what your team does best and outsource the rest.

Both automation and outsourcing will increase your flexibility and help you focus on what matters the most in your business. It is really worth the effort, taking your time doing research on the best tools and most advantageous outsourcing offers will also translate into quality and efficiency improvement.

Make people aware of your product

You should really make the effort to increase your product awareness when about to scale. That’s why particular attention should be given to marketing and looking for the most scalable method of marketing. One of the most preferred types of marketing chosen by startups is content marketing. Giving your audience the content they need has huge viral potential and can boost other marketing strategies you use. For example, if you want people to sign up to your email list, valuable content can drive that.

Needless to say, the most efficient channels to reach the audience are social media. Remember that sharing interesting content on Facebook or Instagram could be essential to reach a wide range of clients. It will also help to not let current clients forget about your brand. When it comes to scaling, all you want is to boost the growth of your client base.

Remember to avoid overboarding

That’s right. When your company is successfully scaling it is easy to go overboard. Mainly because of self-satisfaction and confidence about the growth, founders are prone to hiring too many people or spending more money than necessary. Don’t make the same mistakes, because it will cause you to waste a lot of resources. Try to stay as lean and flexible as possible during the scaling process. Hire the right people and only the right people. Looking for people with a multifaceted skill set or skills that can be easily transferred will help you adapt to changes faster.

Also, spend your money carefully and don’t be too optimistic after the first successful fundraising stage. Always be prepared for additional spending while your business is growing.

In this article, we discussed all the factors needed to scale your startup successfully. We mentioned the necessary resources - time, money, people and organizing the work properly. However, sometimes the biggest barrier to overcome is in our mind. Even if our business is definitely ready to scale it won’t move forward if you’re not prepared for it. A good strategy is necessary, as is the courage to follow it.

Any comment you want to share with us? Drop us a line: hello@start-up.house

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