Scaling means increasing your overall revenue without spending a significant amount or adding more resources. However, when you want to grow, you have to spend more to make more.
For example, a software firm doesn’t have to spend more to bring its product to more consumers since they have already paid for the software’s initial development. They have successfully scaled their product by reaching out to more consumers without spending a lot. Likewise, if the software company wants to open a physical office and hire new staff, then it’s focusing on its growth as it will be spending money on the new office and employees. Scalability is about capability and capacity. Does your company have the capacity to scale? Will your business systems, team, and infrastructure able to handle the challenges that come with growth? Ask yourself these tough questions before you decide to take the next step.
The greatest challenges startups face when scaling
There are many difficulties that startups encounter when scaling up, but the 3 most common challenges are:
1. Scaling too soon - Most business owners make the mistake of scaling up too early. If you scale up too soon, it can be harmful to your startup since the increased workload and the additional expenses can consume you.
2. Implementing new processes without slowing down - When your business has scaled up a bit, you’ll be implementing changes to the processes and creating new processes to handle the workload. Furthermore, you will have to develop a communication system to keep everyone, from your team to shareholders updated on the daily progress. These concerns can slow you down.
3. Managing several departments - During the early stages of your startup, you may be alone or you have very few people in your team. Managing your business at that stage is easy, but when you reach the advanced scaling phase, you have a bigger staff to manage with various divisions. It can be challenging to have everyone share the same values and enthusiasm as you.
Based on statistics from Small Biz Trends, ninety percent of startups go out of business every year. The reason? The failure of startups to overcome the challenges that come with scaling. Therefore, you have to be ready for these challenges so your business will survive the scaling process. Carefully assess the condition of your startup. If growth causes your business to suffer because of confusion, inadequate staff, missed opportunities, insufficient delivery capacity - your customers will be very unhappy. The processes that were fine when you were starting are no longer allowing you to move fast enough. You will be struggling to keep your company afloat or putting out fires. All these scenarios are very stressful.
Make Your Move
You already have a better understanding of what scalability is and the main challenges you will encounter. It is now easier for you to make better and well-calculated decisions. Be realistic about your present situation and utilize your resources and time accordingly. Be prepared to adapt to the many changes that are part of the scaling phase. Growing means you have to be ready to take on new challenges and still stay on track. Prepare by having your founding principles, efficient systems, and right priorities in place. Lastly, make sure to have a clear vision and that your team respects and values it.
