collaborative post | There are two times when an otherwise healthy business is at its most vulnerable. One is while it is first started and just finding its feet, the other is when it’s scaling and growing to the next level. In both instances, you have to work to find the way into a new normal, and that can be difficult if you don’t know what kind of difficulties to expect.
A lot of the mistakes new business owners make are fairly obvious, but what about the mistakes that you should avoid when scaling your business? That’s what we’re going to take a look at.
Being too loose with your plans
If you plan to scale your business, then you need to make sure that you have a plan with a core mission that reflects getting your business healthily to the next level. If you get that additional funding necessary to start growing, then don’t start getting distracted by ideas that you haven’t thought through, and don’t try to chase every single new opportunity.
Start taking on too much at once and get away from that core mission, and it can end in disaster for you, as you end up spending the funds and resources meant to help you establish a new normal, but without any guarantee of getting there.
Not ensuring the market has room for the “new you”
When you’re scaling your business, you typically want to make sure that the additional revenue needed to support the business on the other side is there for the taking.
However, that’s not going to be true if you have already exhausted your market, as it is, and you haven’t done any work to secure a bigger market share, whether it’s by targeting a different demographic, moving operations into a new country, or focusing on improving the lifetime value of longer-term clients.
Do your market research to make sure that the market can make room for your new and improved business, and don’t make the jump until you’re sure there’s solid ground to land on on the other side.
Failing to prepare your marketing
When you are scaling a business, then you have to ensure that the demand is there to support a much bigger operation, as mentioned. While you should take the time to confirm that the market has space for you, being able to take up that space is entirely different.
You might already have additional demand that you can tap into once your business grows, but you should also look to make it sustainable, and ongoing, and to maximize it. Make sure that you’re not leaving your marketing budget out of any plans for your new funding, and give it a long-term, manageable but effective budgetary boost to ensure that you’re able to reach more people since you’re now able to take on more demand.
Not having your accounts ready
If you’re looking to scale, then there’s a good chance that you’re going to try and acquire additional funding to help you establish all of the extra resources needed to support the business in its next phase. However, if you want that funding, then you had better ensure that your accounting is there to support you.
Messy accounting with missing financial numbers is going to be very unconvincing to any lender or investor, as it can make it difficult to truly tell how profitable a company is. If you’re living with messy accounting, then you should take the time to work with a CPA, who can help you get your books in order and help you much better understand your own financial situation.
Finding yourself on the funding treadmill
If you get a round of funding, and you end up spending it, only to then need further funding, and on and on you go, you can take on a lot more than you really need to. This goes hand in hand with the habit that business owners have of losing track of their priorities.
You want to make sure that you have a good idea of precisely what you want to do, what resources you need to do it, and how to use those resources to achieve that core mission. Start taking on too much growth, and too much debt, and you can end up leaving your business in a precarious situation.
Get organized with your labor
Scaling may very well involve hiring more workers for your team, which means that the managerial burden is going to get bigger for the business. It also means that you, as the business owner, are going to get further and further away from the work on the ground. As such, you need to establish working practices that help to keep your team productive and organized.
The use of organizational tools like HVAC software to help plan around a workforce capacity, the activity status of different workers, and scheduling for an HVAC team is a sterling example of how you can do that. Software can help your managerial team keep a hand on the leash of a growing team.
Hiring without a real plan
As mentioned, you may be likely to hire more people onto your team when scaling, but you should make sure that you do it in a way that makes sense. First of all, establish a real recruitment process that ensures that you’re able to select the best candidates for a given job.
Work out how many additional people you’re really likely to need in every section of the business, and take your time, don’t rush hiring them all at once. You can find yourself expanding your payroll much too quickly to keep up with. Scale your team gradually, and ensure that you have the necessary resources to onboard, train, and manage them.
Not beefing up your sales team
As mentioned, your business is going to have to tap into additional market demand in order to generate the revenue to support its new, bigger form. As such, while you might want to exercise some caution in how you hire extras for other teams within the business, you should be willing to improve your sales team and scale it as soon as possible.
This is the team that’s going to be doing the majority of the work of bringing in new customers and increasing their lifetime value, as well. Make sure that you treat your sales team well, incentivize them to perform, and offer a supportive environment that enhances their work to get the best results out of them.
Not verifying those that you hire
When you’re trying to scale your business, then there may be a certain aspect of time sensitivity. You want to make sure that you have the size of a team necessary to handle the additional demand that your business will take on, so you might not spend as much time verifying the applicants that you are interviewing.
To put it simply, that can be a massive mistake. Ensure that you take the time to check up on references, cross-reference any aptitudes that your most promising candidates mention, and perform a background check if necessary. While you might want to trust those who might seem a good fit, there are plenty of people willing to misrepresent themselves to get into a good position.
Not scaling in time
The business world can be a ruthless one. Just as you can make the mistake of trying to scale before you have your research done and your core mission outlined, you can miss your opportunity to scale, at the same time. If you are dealing with a swell of customer demand, but you find yourself unable to adapt to that demand in time, then it may very well end up going somewhere else.
You have to keep a close eye on the paradigm of the market, as the introduction of new competitors or other shifts in the market can result in your window to scale closing. When you identify the opportunity, start working on making the move, and making it right.
Not changing as much as you need to
You shouldn’t simply assume that you just need to establish a bigger version of the business you already have in order to grow successfully. You have to look inward, at how your business runs, to work out whether it’s truly going to support how the business has to function in the future.
You might think “we’ve always done it this way” but that attitude can stifle the very innovation and creative organization that can allow you to really take advantage of new opportunities. For instance, you might have to change the internal management structure of the business or the particular processes or equipment that you use to work. But that change may very well be necessary.
A scaling business has to be able to reach the level of revenue to support its growth, which means not only investing wisely but taking the opportunity to become a leaner, meaner machine as well. The tips above can help you do just that.