Entrepreneurs excel at creating solutions to big problems, but they all seem to struggle with scaling a business. These big thinkers often use the concepts of scaling a business and growing a business interchangeably, but in reality, they’re two completely distinct concepts.
For example, consider a successful startup or new small business: Without a clear definition of scaling a business, we mistakenly attribute success to these companies due to their fast, massive growth. Is this sustainable growth? Sometimes, yes. However, it’s often a sign of accelerated growth without a solid foundation, which makes the company vulnerable to problems. Learning how to scale a business mitigates these risks by ensuring that foundational operations are in place to support sustainable, long-term growth.
How to scale your business vs. how to grow your business
Knowing how to scale a business requires an understanding of the difference between growing and scaling. When you grow a business, you add clients and team members while costs also increase. In other words, your business is growing in size but not revenue, which is not sustainable, especially if you suffer a dip in clientele. If this happens, you’ll be left with employees and resources but no work or revenue to sustain them.
When you scale your business, you add resources and team members as revenue grows but at a slower rate than the growth of your client list. As a result, your business scales in a manageable way, allowing margins to increase slowly over time. And if you experience a dip in clientele, your revenue is still enough to sustain your workforce and resource costs.
Learning how to scale a business
How do you scale a business? To create a working definition, you must consider what it means to start and grow a business. You started your company to fill a need in your market, make a profit, and possibly fulfill a dream. Business growth is necessary to remain profitable and expand your market reach.
Many people think of business expansion as “hockey stick growth,” where, after an initial period of linear growth, the business hits an inflection point, and revenue shoots up. Rapid growth is alluring, but focusing on this right away can cause some entrepreneurs to lose focus. Tunnel vision like this diminishes the importance of the linear growth period that comes before the rising handle of the hockey stick – the blade – where the most critical work is done over, typically, three to four years.
Scaling a business means utilizing this “blade period” to put systems and procedures into place to create lasting, profitable development. In addition, the blade period is where you establish your core values, company culture, and brand identity, develop the client experience, and create your initial business model. In short, it’s the make-or-break period of any business.
Scaling a business is challenging; it requires a thoughtful and meticulous approach and a solid foundation in place for when you hit a surging growth curve. Here are the most important things to remember when figuring out how to scale a business mindfully:
Tips for how to scale a business
When discussing how to scale a business, we’re referring to growth strategies that align with your business vision while managing the impact of growth on your company. The following tips for how to scale a business offer a reliable and sustainable scaling strategy.
1. Know your purpose
Scaling a business relies on creating customer loyalty, and focusing on employee loyalty is the best way to build customer loyalty. When your employees are happy, they’ll spread the word and pass on their enthusiasm for your company. Employees are loyal when their purpose and values align with their company, and they feel their careers have a higher purpose.
If you don’t start with your “why” of going into business in the first place, then learning how to scale a business is of limited utility. Knowing your purpose and successfully communicating that to your team is the way to make them raving fans of your company and organically drive growth.
2. Develop a business map
Most entrepreneurs have a business plan, but have you thought about developing a business map? A business map is an effective and comprehensive way to scale a business and meet its goals. It also prompts you to ask foundational questions like “what business are you really in?” and “why did you get into this business in the first place?”
Business maps challenge you to look at where you came from, define your purpose for starting the business and look ahead: What’s next for your business, and where does your company ideally end up? Documenting these goals is a crucial part of learning how to scale a business and will be a helpful reference when times get tough.
3. Perfect your product or service
When focusing on massive growth, many business owners fail to ensure that they offer a solid product or service, often figuring that they’ll fix the issue after getting more users or distribution. However, if you don’t get rid of the bugs first, they’ll worsen when scaling a business. Learning how to scale a business before pursuing growth will save you headaches and money in the long run.
The early years of your business are a time to listen to feedback, find issues and improve your offerings until they meet your customers’ expectations. When you create a product or service of excellent quality, many growth issues will take care of themselves. Addressing first-iteration problems also helps you assume control when scaling your business, as you’ll have a deeper understanding of what you and your customers want and need your product or service to be.
4. Create thoughtful processes and operations
How to scale a business doesn’t just involve growing upward and outward. It also means ensuring the seamless function of your internal processes and operations. The last thing you need is to lose customers you’ve worked hard to acquire because of a weakness in your infrastructure.
While perfecting processes, remember that systems and processes that worked in your company’s early stages may not work on a bigger scale. As you grow, you’ll need to tweak processes, which is where adaptability and flexibility become essential. The key to scaling a business and forming a solid core is establishing a framework of what worked and kept your business running smoothly in the early years. As growth occurs, you can always improve on this core, but it isn’t easy to recreate once you’ve grown past a certain level.
5. Establish your team
It seems obvious but establishing a strong team is a prerequisite for scaling a business. Developing a flexible management team to grow with the company is crucial in learning how to scale a business.
Your team is not just about your employees, though. To scale a business sustainably, work on developing external relationships with suppliers, partners and other outside organizations that are part of your overall growth.
And remember your customer base, which is another core member of your team. One of the best things about operating a small business is establishing intimate relationships with your customers and giving them the experience that you want from beginning to end. The goal is always to create a raving fan who advocates for your brand and helps scale your business by spreading the word.
Remember, the community you create around your growing business can bolster your foundation, strength and leverage. Having a solid network is part of the definition of scaling a business, so take the time to build a team to propel you into the future.
6. Learn when to delegate
With a strong team, you should have enough trust to leverage important tasks so you can work “on” the business instead of “in” it. However, as a business owner, you want to feel involved in every aspect of your company and may have difficulty letting go in certain areas. Leveraging tasks is a massive part of learning how to scale a business. What are you doing that someone else could handle?
Don’t trade your time for dollars. Your business has to be able to run itself and thrive even when you’re not there. Do this by addressing limiting beliefs such as “if I want something done right, I have to do it myself,” and by establishing delegation habits that allow you to own your time.
7. Build your brand
Scaling a business requires learning who you are as a company: what can you offer your customers? How do you compare to the competition? What do you have that no one else does? What are your biggest weaknesses? What makes you so powerful? What is your message? How do you disrupt your industry?
It could take years to answer these questions, so start with a basic framework and build from there. Smaller businesses can shift gears easier than big corporations, so if there’s a need for a new approach, use that as an opportunity to innovate and adapt.
Remember, your brand will set the tone for your company’s culture as you scale. It will set the standard for making your hires and establishing the client experience you want. It will also impact marketing, sales and design efforts and influence the company you become
8. Connect with your customer
What’s the point of scaling a business if it doesn’t produce loyal customers? Creating raving fans of your product is critical to allowing your business to thrive amid the ebb and flow of ever-changing consumer preferences. When scaling a business, you’re in an incubation period where you can test approaches to building and maintaining client relationships and client-centered practices in every facet of your business. You want every team member to demonstrate empathy, respect and open-mindedness to foster a collaborative culture of innovation. From there, everyone on staff can build a rapport with your clients, creating connections that will help your product sell itself.
9. Work on your networking skills
You’ve probably heard the saying, “no man is an island.” This nugget of wisdom is very true for entrepreneurs, who must develop and cultivate a vast network of colleagues, business coaches, resources and mentors to connect them with the right people to ensure continued growth. When learning how to scale a business, attend business networking functions and join an industry-related group for continuing education and professional connections. It’s also productive to get involved in personal or business coaching and connect with those business veterans about becoming your mentor. Scaling a business is not a solitary task — the more people you have on your side, the more successful you will be.
10. Prioritize sustainability
Creativity is vital for any company but running a business is not the place for knee-jerk decisions. Think of creativity as a method for scaling a business rather than a free-for-all tool for solving problems. Prioritizing sustainable growth helps you approach challenges thoughtfully and find solutions that support your company’s long-term well-being.
11. Continue adapting and innovating
Scaling will seem impossible if you’ve hit a plateau. If it feels that way, it’s time to change your approach because learning how to scale a business is always possible. When was the last time your business focused on innovation? When did you last assess the barriers holding your company back and tackle them head-on? In business and life, if you’re not growing, you’re dying. Don’t change your company for change’s sake – scaling your business will become easier when you strategically align your choices with your ultimate purpose. Take the time and do it right. Adopt a winning mindset but be mindful as you do so. Remember that massive growth is one thing, but sustainable growth makes for a lasting company.
Discover the keys to scaling a business for massive success
Your lifeline to long-term success is answering the question, “how do you scale a business?” To achieve this, it’s important to create business advantages that cultivate clients for life, work toward discovering your competitive edge, and truly understand the power of anticipation.
To get the guidance you need, look toward people you admire. Tony’s Business Mastery program will teach you tools and strategies to help you work toward sustainably scaling your business. We’ve put together a business content series, The 7 Forces of Business Mastery, to get you started on this process. In this series, you’ll learn the seven key factors that can make or break your business and how to use them to scale your business and move the needle toward sustainable success.