The decision to scale up your business, whether it’s from a few hundred thousand a year to a million, or a million to a few million, or a few million to ten million or more, is the same as any other that you’d make if you wanted to implement change.

Change is what it says on the tin. It doesn’t matter what the purpose is.

You know that as a company you must grow or die, though it’s possible to keep your growth modest if you lack the ambition to do anything else. Keep your costs under control, raise your prices in line with inflation, and limit inward investment. And, it seems, that this is precisely what the majority of small businesses want.

If, however, you are among those who want to breathe rarified air, then you need to be aware of a number of challenges that perhaps you hadn’t really thought about.

These are things that could put you out of business if you don’t plan for them.

 

Scaling before you’re ready

The first one is succumbing to the temptation to scale before you’re ready.

If you’re ambitious, then it’s likely that you can’t wait to grow. You already have an exact turnover figure in mind. You may even know when you want to go public.  But hold on a bit.

You must have everything in place first, and it must all be working perfectly. Why?

Because when you scale up, little problems become even bigger ones. They don’t work themselves out in the wash. They don’t go away by themselves. Instead, they become gigantic.

There’s an old adage that says, “To err is human; but to really screw up you need a computer”. That was popular when desktop computers first emerged. There were a lot of problems with them. The operating systems were far less friendly, and fewer people knew how to fix them.

This saying, however, perfectly illustrates what can happen to known problems when you scale up. They manifest themselves in ways that they hadn’t before because what looked like tiny flaws are magnified into major obstacles.

To avoid this challenge, make sure that you can walk perfectly before you attempt to trot.

 

Trying to get to there with what got you here

There’s a book titled, What Got You Here Won’t Get You There. The gist is that future success can’t be guaranteed by following past processes; and that’s just for the businesses who are content to stay pretty much where they are.

Scaling up requires different processes; not more of what you have been doing.

Just as a book is more than a collection of blog posts, so the business model for a larger company is more than a larger group of processes that were designed for a smaller organisation.

For example, you may be able to run a company of 20 employees with a team of three directors. You may not even need any other managers, depending on the industry that you’re in.

When, however, you increase the number of employees, to 50 or 100, that’s too many people for three directors to manage. They have other things to do, and there needs to be at least a couple of other people who can oversee the day-to-day problems that are likely to surface.

Thing is that without that extra support, the people who are running the business won’t have the time or the ability to concentrate on the things that are needed to keep it going.

What if there were 200 employees? Do you think that your internal reporting structure would remain the same as it was when you had 20?

You also have to adopt a different approach to leadership and management. That doesn’t mean that you become aloof and unfriendly. Rather it means that you have to be more disciplined about who you see, how often, and for how long.

And when we talk about structure, we don’t mean the traditional silos of hierarchy from days gone by. Employees are capable of doing so much more now. They expect to be given more responsibility and greater autonomy. Neither does it mean a free-for-all, everyone doing whatever suits them, and complete lawlessness.

You have to plan for a larger organisation and either promote existing personnel or hire specifically those who will fill the new roles that will be needed to make it work.

You’ll never be able to scale up, though, by doing things the way you’ve always done them.  If your immediate response to change is, “That’s not the way we do things”, then you have no business thinking about scaling up. In truth, you’re not ready, and if you don’t change your approach, then you never will be.

As you grow, the old way of doing things will become obsolete rapidly. Jobs will need to be combined or redefined. Processes may have to be redesigned from the bottom up.

Teams may need to be broken up and reformed.

There’s only so much that you can plan for. The rest will be unintended consequences and in those circumstances, you and everyone in the organisation has to move with the flow. You have to be deliberately flexible.

Events can be like a flash flood, where a typically dry creek bed suddenly becomes a torrent.

 

Packing more into your already busy day

There’s an old Negro spiritual titled, Ain’t Got Time to Die. Some days, that’s exactly how you’ll feel.

You have to resist the temptation, however, to think that if you just add a few more things to your to-do list that that will solve the problem.

So even when you feel like the slogan seen on one coffee mug, which reads, “I’ve been put on this earth to do a certain number of things. Right now I’m so far behind that I’ll never die” - even when you feel like that, you have to decide what is the most important and do it.

You’ll never get it all done, and if you try, then you could get a permanent holiday.

 

Hiring only for talent

Scaling up requires the right people, too; not just more of what you have. In fact, some if not many of the employees you have may not even be the right ones for the new jobs that will be created as you grow. No doubt some won’t have the right skills; more than that, they won’t have the right attitude.

You will need people from the top to the bottom who have the expertise to make your organisation grow fast, but they have to embrace change, too.

The mantra of the 1990s is still true: Hire for attitude; train for skill. Hire people who believe in what you believe in; not people who just want a fat pay packet. Leopards don’t change their spots, and when you’re growing - when you’re changing from one kind of organisation into another, you need people working for you whose attitude is already the right one.

Family firms struggle with this. Their business is their baby.

On the one hand they want it to grow or to grow up, but on the other when they see what that means, they tend to hold back. They still want to do everything themselves because that’s the way they’ve always done it.

And here’s something that you need to prepare yourself for. It could well be that even if you’re the managing director now, that the amount of growth that your organisation will experience is beyond your current abilities.

For that reason, you may want to bring in an interim MD to make these changes happen. To do that requires humility and honesty. Whether or not you have the courage to face up to the need or not will reveal a great deal about you.

There’s a reason why the CEOs of the largest companies in the world seem to move among similar institutions. It’s because there aren’t that many people who are capable of running them.

You may even want to get a coach for yourself or others on your senior team. These people can help you to keep your eyes on the ball, rather than being distracted by every little thing that comes along.

 

Hiring too many people

When companies restructure because they need to cut costs, it’s always the employees that get it in the neck.

It seems that for one reason or another, the payroll is too fat.

The problem can be obviated by making sure that it doesn’t get too big in the first place. And so while you’ll need to hire more people to aid in the growth, treat each new position the same as you would if you were just starting the business.

That is, every new position must earn its place.

It’s irresponsible to assume that you can hire a bunch of people to deal with your comparatively short-term growth, and then shed them when things level off.

When you employ someone, you’re taking responsibility for that person’s welfare.

Always remember that when you shrink your workforce, it’s because you failed to properly understand your true needs when you took those people on at the beginning.

It’s not their fault.

 

Communicating on a “need to know” basis

If you’ve never been a great communicator, then you’d better get a crash course in it or, better still, hire someone who’s already skilled in that department. When organisations grow, so do their grapevines. You don’t need the rumours to grow exponentially. And people must not get the idea that it’s business as usual, only bigger. It’s not.

Instead, it’s completely new.

 

Allowing unnecessary costs to creep in

It will take more cash to get bigger than it does right now to keep the business at its current size.  That means that you have to keep your expenses under control.  When businesses start to grow, especially if there’s external investment, there’s a tendency to buy a lot of new stuff. New cars, refurbished offices, new equipment.  None of that may be necessary. The illusion, however, will be that it’s affordable.

Evaluate the need for it as if you were a start-up on a shoestring budget.

Money for growth needs to go into increasing your ability to serve more customers than you did before, not raising your living standards.

 

What’s next?

If you want to take your organisation to the next big financial level - whatever it may be, then you’re going to have to structure for it, hire for it, and fund it as if it was a much larger start-up. And then you’re going to have to lead people and manage the processes until you achieve your goal.

Rest assured, however, that once you become a little comfortable with the new growth that you’ll begin to wonder what it would be like to take it up another notch.

Growing a company can be stimulating and nerve-wracking, and the two aren’t mutually exclusive. Before you embark on anything as big as scaling up, talk to a number of people who have done it. Make sure that you have a solid understanding of what will be required to do it.

There’s no shame in deciding to stay small.

 

If you want sustainable and meaningful growth – email me at Be More Effective – The Growth Consultancy.