A business starts with a good idea. You developed a new product. You found a way to tap into a neglected market. You created a better experience for your customers than your competitors do. Whatever your industry, whatever your business model, you have an angle.
But lots of companies that are based on great ideas don’t succeed, and only a small fraction of those that do are able to grow effectively—to scale their business. The ability to scale allows you to take a good idea and translate it into a viable business structured to meet increasing demand.
Scaling is growing, but it’s growing in the right way. It’s capitalizing on what you’ve learned and learning from others in order to grow your business smarter. Whether you’re trying to build your startup or turn a large local company into a national brand, there are simple, often ready-made steps you can take to build a scalable business.
What is scaling in business? What is growth?
Let’s start by defining our terms. Growing your business is obvious enough: Your business has increased its revenue through expansion or other methods. If your restaurant is doing well and you add a second location, your business is growing. If you sign a contract to sell your product at a big retailer, your business is growing. If your agency signs a new client, your business is growing.
If your costs are growing as fast as your revenue, you’re not scaling. But what is scalability? Scaling a business means increasing your output and revenue more quickly than your effort and costs. And while some elements of your business are directly correlated to your size (you’ll need approximately the same number of servers at your second restaurant location), many are not (you probably don’t need twice as many HR professionals to handle the staff).
When to scale your business
So if scaling is defined broadly as streamlining operations and planning for healthy growth, every company is ready to scale, though the steps you take vary depending on where your business is in its lifecycle.
First, it’s never too early to start planning for the future. In fact, planning may be the only appropriate scaling step for early-stage startups, because trying to grow too quickly can overextend a promising business.
So as you’re working hard on the day-to-day aspects of getting started, schedule time to step back and think strategically. Imagine what you want your business to look like in six months, or a year, or five years, and think about whether the processes you’re putting in place now are set to accommodate that future. Pick a few key areas to invest in the right solution instead of the cheapest one.
No matter how mature your business is, it’s helpful to step back and look hard at current bottlenecks and anticipate ones on the horizon. Hiring takes time. Branding and marketing take time. Training takes time. Market research takes time. Get out in front of time-intensive operations so the rest of your business isn’t stalled while you scramble to catch up.
Scaling has to happen throughout your company’s growth stages. There’s no backdating it after you run into a problem. Study the present to see into the future. As they say, an ounce of prevention is worth a pound of cure.
How to scale your business
Just as scaling looks different depending on what stage you’re in, the specific steps you take will depend on your industry, your market, and your goals. But there are four general scaling principles that apply to just about any business looking to grow strategically.
1. Improve your processes
First, standardize as much as you can. Every department doesn’t need its own hiring process, its own performance review, its own email signature. Don’t reinvent the wheel. Keeping things uniform not only makes you more efficient, but it can also reinforce your company’s brand and help create a cohesive culture.
Second, document your processes. The oral tradition is great for storytelling, but it’ll serve your business to put important procedures in writing. How is the company structured? What is the process for professional development? What are the brand guidelines? Is there a dress code? Eliminate the guesswork and let your employees know what’s expected from them.
Third, automate your workflows. Micromanagers, step back. From payroll to workflow to customer support to social media, there’s an option to automate it, and it probably costs less than you think.
The goal of these steps is to let each employee spend more time doing what they were hired to do and less time sorting through ancillary logistics. Ask around for ideas. Inside and outside.
