When an entrepreneur is first starting out, they go through a lot of trial and error. In an effort to grow and scale their business, they often try out various ideas to see what works and what doesn’t. However, scaling a business isn’t easy, and without prior experience, mistakes can be made.
While not every venture will be a success, there are ways to effectively scale your business while minimizing risk. To that end, a panel of Young Entrepreneur Council members shared the tips they wish they had known when they first started out to safely and smartly scale a business.
1. Hire Top-Down And Bottom-Up Simultaneously
With our first startup, we were hyper-focused on growing our team from the bottom up with “doers” and tried to wear all the executive hats ourselves as founders. With our second and third businesses, we have prioritized hiring top-down and bottom-up at the same time, meaning we hire executives and leaders earlier on to manage the “doers” on their teams. This hiring strategy allows us to scale drastically faster and makes our team stronger and more well-rounded from the start. We are able to present ourselves to customers and investors as a company that is punching above our weight, which engenders trust in our company, product and pitch. It also creates more opportunities for people on your team to see how they can move up within the organization, which helps with talent retention. - Swapnil Shinde, Zeni Inc.
2. Avoid Aiming Too High
Hindsight is a wonderful thing, and there's so much I would do slightly differently if I had another opportunity. Scaling your business is a particularly risky endeavor, and a lot of us (ambitious as we are) make the mistake of aiming slightly too high from the very beginning. Growing your business successfully can only work if you have the means to back it up. I wish I could have known just how much planning needs to go into successful scaling. Taking a long hard look at your business and being realistic about where you are compared to where you want to be is hugely important. Be realistic and work with what you have. One of the best ways to do this is by working with the numbers. How is your sales forecast looking? How can it be improved? Start small and then work your way up. - Nick Venditti, StitchGolf
3. Manage People With Metrics
I scaled my company fast and made desperate hires. I didn’t set key performance indicators (KPIs) for every role, which caused a decrease in execution. When my staff felt overjoyed, I didn’t make data-driven decisions because I didn’t have clear metrics laid out. Now I make hires based on clear metrics and we have developed a hiring process. My COO qualifies for skill and I qualify for culture. Then, during the onboarding process, leading indicators show me if a new hire needs more support, is on track or needs to be replaced. Looking back before we scaled the company, I wish I put more emphasis on management and metrics associated with performance. - Libby Rothschild, Dietitian Boss
4. Determine Work Capacities
Estimate how much additional work that your employees will have to do with more clients, and what amount is reasonable to add to a monthly workload. When you are expanding, and you work in a service business, you still have to deliver the same quality to a larger customer pool. Adding too many clients can dilute quality. Talented individuals can burn out when they are given an amount of work beyond their capacity, which can strongly decrease their productivity. Decreased productivity means a lower quality of work and unsatisfied clients who will take their business elsewhere. It's an easy mistake to make, but when you have a team that feels comfortable giving this feedback, then you can scale accordingly. Determine work capacities before adding on new clients. - Duran Inci, Optimum7
5. Dabble Before Committing
Dabble in anything before committing to it fully. Whether it's trying out a new type of hire or marketing channel, start small, figure out what works, then scale. A good example is in choosing where to spend your marketing money. A bunch of platforms and salespeople are going to try to convince you to spend a bunch of money. Don't. Sign up with something small to see if it will work for you, then, depending on the results, go from there. Hiring a new designer? Start with one design from them. If you like them, then you can bring them on for more work. You have to be careful not to overextend yourself, especially when it comes to hiring. Once you bring people on, you're responsible for them, so make sure you can take care of them. - Andy Karuza, Base64.ai
6. Figure Out The Best Time Of Year To Scale
The first step for how to safely scale your business is to figure out the best time of year to do so. This isn't something that many businesses consider, but it can have a profound impact. For example, you should avoid bringing in more people or expanding your product range just during the holiday season when your product sales are high. You won't have the time or free hands needed to onboard new hires, and you'll remove the focus from making sure that deals go out on time or that your customer support is on the job. Picking a slow season to scale up is smarter and safer since you'll be able to put in the time to help new people get on board, and you can troubleshoot problems that come with new product launches. - Syed Balkhi, WPBeginner
7. Reach Out To Mentors
To properly scale your business, don't be afraid to reach out to mentors and other entrepreneurs to get their advice. It can be challenging to scale your business for the first time and figure out what exact steps to take so it grows successfully in all areas. Expert advice can put you on the right track so it's easier to feel confident about your decisions and strategies. - Stephanie Wells, Formidable Forms
8. Speak With A Finance Professional
The idea of scaling up may sound like an attractive proposition; however, it's important to remember that your costs increase as you grow. Don't just hope that your plans to scale will immediately lead to increased revenue. You need to prepare to pay for your expenses in case you don't see the cash flow that you're expecting. Before you think about taking on debt, speak with finance professionals. They can help you find ways for your business to finance your growth strategies in a sustainable way. You can also scale your business gradually instead of doing it all at once. Bring in a few new people at a time. Increase your lead generation by a small degree. Test to see how your efforts go before committing to them. - Blair Williams, MemberPress
Image Credit: Pixabay | geralt
Membership is open to businesses and organizations interested in increasing visibility and brand awareness in Westchester County and surrounding areas.