Scaling up a business is a significant step that can transform your company’s trajectory. However it’s crucial to approach it with careful consideration and a well-defined strategy. It entails expanding your operations to accommodate increased demand, whether it’s by hiring more employees, investing in marketing, moving to larger premises, or enhancing your product or service offerings. As a business owner, the concept of scaling up might be both exciting and intimidating. Here I explain what you need to be thinking about so you know how to scale up a business.
What is a scale up?
The OECD defines a scale up as a business that has a turnover growing at least 20% a year over a three-year period, and with more than 10 employees. So, it doesn’t have to be a massive business, nor is this timebound. You could still be classed as a start up in three to five years if you’ve not hit that threshold. Conversely, some businesses reach scale up potential within a matter of months if they’ve got the right product-market fit.
Make sure you have clear objectives and a vision
Before diving into the complexities of scaling up, it’s essential to have a clear understanding of why you’re pursuing this path. Clarify how your business will evolve as a result of scaling up and identify the specific needs you aim to address. These might be meeting rising customer demand or entering new markets. Comparing your current business state to your envisioned future can guide your decisions throughout as you scale up.
Maintaining focus
Sometimes it’s easy to lose focus on what you’re actually in business for during the hustle of expansion. This can then be to the detriment of the business overall. It’s imperative that you are crystal clear on your company goals, what you want to be (and what you don’t). Define what success means for your business and stay aligned with those principles. Also consider what success looks like to you, as it is very different for everyone.
Strategic planning
Scaling up necessitates a comprehensive and detailed strategy that encompasses all aspects of your business. This includes addressing potential challenges, opportunities, and risks, and crafting a plan outlining the necessary steps to achieve your objectives. To increase sales and maintain profitability during scaling, consider factors like hiring more staff, investing in marketing and optimising your supply chain. There may be additional legal, tax and HR considerations to think about when you’re expanding. So do make sure you’re equipped to handle the operational, financial and logistical changes that come with expansion.
Hire for the company’s needs, not yours
As you prepare to scale, your hiring decisions should be guided by the needs of your business, rather than personal preferences. Identify the skill gaps that need to be filled to support your growth objectives. Tailor your job descriptions to attract candidates who align with these specific requirements. While it’s important to consider cultural fit, prioritise candidates who can contribute directly to your goals and who can add to the culture.
Seeking external guidance
The scaling up process can be intricate and challenging, making external help invaluable. This can be a business coach or consultant who brings their wealth of experience and allows you space to discuss and solve problems. It can also be a fantastic catalyst to prevent scaling up too fast and making emotional decisions over practical. Do get in touch if you’d like to discuss whether it’s the right time to scale up your business.
Scaling Up by Verne Harnish is a great follow up book to the Rockefeller Habits. Do check it out if you’d like to read about businesses who succeed compared to those that don’t.
Photo by Jen Theodore on Unsplash