There will come a point in time when your business is at a certain stage that begs you a question, is it time for my to business grow?
When it comes to scaling business, it can get quite tricky for a lot of entrepreneurs. It can also become a challenge to understand and overcome since the result of deciding to scale too early or too late could make or break your business.
17 Lessons On Scaling Business
Many veterans of the industry have tried their hand at scaling their businesses many times over to varying results of success and failure, and thus, have a lot of views on the challenges of scaling.
They have shared many of these and can be regarded as lessons on understanding scaling for your own business, here are 17 lessons on scaling that every business owner should consider:
1. Why Scale
Why do companies scale in the first place? One of the biggest factors is when your business grows to a certain number of people that it requires you to scale your business in order to maintain control and support the larger workforce.
Knowing the limit of this growth is described as “Dunbar’s Number”, estimated that at 150 people, scaling your business would be a good idea, here’s why:
- 150 people is the suggested limit within a company where one can maintain stable social relationships with others.
- As your business goes beyond the 150 people, it will come a time where most people in your business won’t know everyone else, which makes communication and coordination more challenging and causes the need to scale up and support the larger organization.
- At the third stage of your business, its actual scale shows real growth and either has streaming revenue or a visible view of where the revenue is coming from.
2. Not All Startup Advice Applies To All Stages
Scaling your business is different at every stage and advice given to you could work for one stage but will probably not work on next.
Understanding the different stages of business will let you know that the challenge of scaling for it will be completely different as there are different factors to consider.
3. Priorities Vary At Every Stage
After scaling to different stages in your startup business, some things tend to be more important than others, thus, knowing which of those things are is critical to the growth of your business.
An example would be at the first stage of your startup business, it’s more important to get people to care about your product rather than knowing how much money it would make you.
4. Scaling Requires Attention To All Details
Before you begin to think of scaling your business, it’s important to take note that the flow of resources and the rate at which your business is growing won’t always be even.
But in spite of that, taking note that this is happening should make you think one step ahead of your business. But also keeping track of the rate that your business is growing makes sure that it’s ready to scale
5. Timing Should Be Your Top Consideration When Scaling
It can be quite confusing when considering the right time to scale as doing it too soon could risk your business to fail and doing it too late could leave your business behind the rest of the competition.
Knowing the right time to scale is based on the current stage your business is in. Early on you don’t really have to worry all that much as your business is still getting its feet wet in the market and there aren’t a lot of factors that could affect its growth.
When your business gets to a stage where your operation is much bigger and you have made a name for yourself is where scaling becomes more frequent and challenging. Your competitors see you now as a threat and will start to try and get the upper hand on your business.
6. Don’t Be In A Hurry To Hire
When it comes to startup businesses, it should be kept small and simple, and once it’s possible to become bigger and you make it to a point where it’s all working out, then comes the time to scale your business.
It’s bad for startups to already have a lot of people when the business can’t really handle it since it isn’t really ready to scale yet. Bigger steps require more growth and startups only need more of it when the time comes for them to scale.
7. Scale by Doing Things that Don’t Scale
Getting as many people to take interest in your business isn’t always the best thing, sure there could be millions who recognize what your business does/is. But how many of them are actually sold to your business itself and not just their idea of it?
It’s better to have a hundred people who love the products and services your business provides rather than a million who just likes most of what you’re selling but passes on the rest.
This might not be a convincing idea as small market interest means lesser profit, and overall it won’t allow you to scale at a normal pace.
But the benefit and challenge of doing things that won’t scale, is to instead focus on scaling each customer that creates that “loyal customer base” of your business, thus allowing your business to still grow slowly, but surely.
8. To Start Scaling, Split The Team Into Two
The biggest difference of scaling your business between stages is how you build beyond your main team. Since the business has become bigger, your team can be split to focus on working on different things and can be categorized into a “Building” and “Supporting” group:
- Team “Building” — Focuses on engineering, products, design, growth, etc.
- Team “Supporting” — Focuses on supporting the first team with tasks regarding office space, legal, PR, customer service, sales, operations, HR, recruiting, etc.
As two separate teams, your business in a way can cover larger ground and build it even bigger to support your constantly growing number of products and customers.
9. Great Ideas Come from Small Teams
The creation of a great product even at scale comes from the smaller teams within your business.
Through the proper management of your business and people, it could result in some bare-bones products made by a small team of even 1 or 2 individuals that could just barely work but has a high potential that could make your business a great amount of profit.
Taking the time to know these small teams and guiding them would pay out with great products that not only make a profit but also shows that small teams of creative minds and good leadership can lead to something greater than your business itself.
10. When Scaling, Make Recruiting Your Top Priority
Your growing business needs a big workforce to make it run like a well-oiled machine, as a business scales that process of hiring people becomes more and more common.
The recruitment process itself is basically the same for all stages, but as with scaling, some parts of the process tend to be very different from one another as more people come into the fold:
- At 15 people, a single person on your team can do the recruiting.
- When you aim for 150 people, you will need dedicated recruiters.
- When the aim is for 1,500 people, you will need sourcers, recruiters, schedulers, managers, and other people to support this whole group.
Overall the process does remain the same, but the need for more people means the bigger the team it requires to manage it as well.
But as important is growth to your business, you should always remember the core culture and values that let you create this business in the first place so that your goals are still clear even if the number of people your business is handling is getting larger.
11. Have a Framework for Talent When Hiring At Scale
It’s easy to just hire people to do their job, but it’s much harder to maintain a high standard when it comes to having quality people in your workforce when scaling.
Executives at YouTube have used two tools for judging talent when hiring, first is by way of determining what “level” the person is through a series of graphs that cover skills and scope. Second is what they call “Dream Teams” which involves taking teams of people and asking them who would they hire to make up their own team from scratch.
These two tools were used effectively enough that helped the people at YouTube with their hiring process to narrow down the best people for the job.
At scale, your business would need to be more selective of what kind of skilled people you are looking for and having a method to do that would save your business the cost and effort.
12. Should You Promote From Within Or Hire Someone New?
When scaling, a question sometimes pops up: “Should I hire more people outside of the company to help us? Or Should I only focus on my team and improve their skills?”
Taking either of these options comes with certain challenges, each of them having its own pros and cons but it all depends on what would be more useful. Would using the resources to have workers on the outside in order to produce faster results? Or take time and effort to improve the people within your own team for the overall growth of your business.
This choice all depends on what kind of goals your business is going for, but managing a balance between the two could allow them to benefit from each other by way them focusing on their strengths and understanding each other’s weaknesses.
13. Know The Importance Of A Strong Culture
Within your business, it’s always important to make it always known to new or veteran employees alike what your culture and values are.
Your company culture is the personality of your business, which is primarily made up of your whole team. But your culture doesn’t just say who or what your business is, but what it aims to be.
Building your culture and making it known allows your team to think bigger than just themselves. It gives them a reason to make their company reach even higher than what they are today.
Failure to practice your business’ culture and values makes it looks like the things that your business is doing isn’t for any greater purpose to other people.
Make sure people believe in your culture and values by reinforcing it, hiring against it, and to reward against it, so that people will understand the purpose of your whole organization.
14. Communication Is Faster And Easier Within A Smaller Workforce
Communication within your business is essential as you scale. But the challenge is how to communicate with it if the whole business is a thousand strong will be quite difficult but can be handled differently for every business.
So what can you do to make communication within your business easier as you grow in scale?
There are plenty of options, but it all depends on how you want to approach it to properly get everyone within your business informed, here are things to consider:
- Staff meetings during the first day of the week – summary of what the team did in the previous week, what they are doing this week, and let different teams communicate with each other
- Business Strategy reviews on Tuesday and Wednesday – getting into the specifics concerning your products and your launch goals
- One-on-one meetings on Thursday
- Full company-wide meeting at the end of the work week – a way for anyone in the company to ask anything regarding different things in the business
15. Start Coaching And Stop Solving Their Problems
As a leader, you have the responsibility to look after the people who serve you, but that doesn’t mean that if they have a problem, you’re the only person solves it.
Even if you are the type of leader who would always get things done for your business, it is not always applicable that a problem should be solved by you, this kind of mentality does not scale for your business.
It’s much better to be a coach to the people on your team and help them find ways to solve their own problems instead.
Taken from the word and the act itself of “Blitzkrieg”, where you gamble every resource you could spare without any backup to keep you going that could result in you either winning big or losing big.
“Blitzscaling” is an analogy to this old military tactic that relates to your startup business when you decide to scale early on. You gamble all the resources you can spare, hire a lot more people, and take a shot at possibly making it big. Although the consequences of taking this risk when you scale are very high especially if it all fails possibly resulting in the loss of your entire business.
17. The Role of the CEO when “Blitzscaling”
Blitzscaling is a no-holds bar time of scaling that focuses resources on scaling the business as big as possible. As the CEO is one of the fountainheads of your business, he/she would be tasked to organize what is necessarily chaos and some have narrowed down their organization as being the following:
- Overall Business Strategy
- Company Culture (No one else besides the founder/CEO can affect culture)
- Assigning Senior Management – these people will be the domain experts of their function who are better than you.
Some Final Thoughts…
Scaling your business is about change and just like any other kind of change, it’s difficult and risky.
Keeping track of everything and making sure the all is ready and right in your business can feel overwhelming.
But it all comes down to experience as well and scaling does pay off in very big ways when done right that would improve the overall success of your business. So It’s worth doing it right.
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