Almost everyone is going to think about growing and scaling, sooner or later. Almost everyone is going to make their plans, make their play and hope it pays.
But the reality is, actually scaling is where almost every business fails. I’ve spent the last few years working in scaling businesses, working in businesses that were small and loved it, and asking myself what makes growth happen.
The best way to sum it up is this one right here:
Growth is never by mere chance; it is the result of forces working together — James Cash Penney, Founder of JCPenney
Penney knew growth. He knew it well. He grew his chain of stores from 175 in 1917 to 1,000 in 1928. That’s around 500% growth. Not so shabby, right? The JCPenney stores didn’t grow by chance at all, it was calculated and it was the result of careful planning in advance.
How you actually go about turning your freelance business, band merch, Etsy store or startup into a scaling biz is the result of multiple parts coming together and working the right way.
Five Essential Elements Of Scale For Businesses
- Businesses scale with people.
- Businesses scale with processes.
- Businesses scale by cutting the fat.
- Businesses scale by making reasonable compromises.
- Businesses scale with managers, not technicians.
This post is for you if you’re an entrepreneur or creative who wants to turn their business into a scaled company, and who wants to have the potential for future growth.
I want to be clear – growth is not a simple thing. It’s not something that happens overnight, it’s not something that you can do in a series of easy steps.
Growth is tough. The scale is tough.
These elements aren’t going to mean you’ll succeed, but they are important considerations that you have to keep in mind. And highlighting them will let you factor them into a long-term growth plan.
Okay, businesses don’t scale with people alone, and you can’t scale solely through adding team members. Why? Because your scale fractures and falls apart when you lose people power.
But adding to your team is still hugely important. The first step to scale is to have more people who can automate and manage processes, products, and principles. That’s a must. You can’t scale any business as a solo operator, because sooner or later, you will reach the limit of what you can do. When you hit that limit, there’s nothing that can be done to increase scale beyond finding more people to bear the load with you.
If you have every single part of your business documented and systematised, you still need people to keep everything running and keep the wheels turning.
If you’re a founder who does not want to invest money and time into growing a team or outsourcing it effectively, things will fall through the cracks.
Hire people. Good people. Not necessarily Rockstar McAwesomeville people, just good workers who do good work.
Make sure that if you are committed to scale, you’re also committed to empowering your people to do what must be done, and you’re ready to trust them.
Related Article: Work Smarter, Not Harder, To Scale Your Business
Hiring your first employees is an exciting milestone for any startup founder. You first need to know when it’s time to expand your team. If you and your co-founders are trying to be as lean as possible, it can be difficult to convince yourself you need more help — and sometimes, it’s feasible to put off bringing on another person by giving everyone just a little bit more to do.
If your business just kind of runs in everyone’s heads, and you all sort of know how it’s supposed to work, and what happens when that makes you pretty normal.
But the problem is, that’s not going to let you scale. When you scale, you need to be making sure that everything happens at the right time, the right way, with the right amount of resources. Having the right processes in place is important for that, and it’s only going to make your job as a manager and founder a lot easier.
Instead of trying to find out how to do things, or wasting time, or blowing opportunities, you can apply simple systems and processes and then monitor them.
You’ll find these everywhere. You’ll have processes for a lot of different things. In fact, I even have a process set up for creating and sharing content, so I’m never futzing about.
Your processes are what you give to your team to allow scaling and growth to happen. Your processes will be run every single day, and they must be revisited regularly.
If something happens more than once in your startup, document it and be ready to run it again. Don’t let people just do whatever works for them. Give them guidelines to follow to make sure that your business is functioning cohesively.
Even when your startup is a one-man show, you will soon find that you are “out of control,” unless you start organising and writing down how and when key things need to get done. Like it or not, you are now entering the dreaded realm of “formal business processes.”
The right question is: “What is the minimum that I need?”
Cutting The Fat
There are always products and services that are “nice to have.” Every business has them, and sooner or later, they have to get trimmed, because they get in the way of the key stuff that you do.
Generally speaking, if you’re scaling a business, you should identify what parts of it take up the most resources while offering the least returns. If there isn’t a heavy meta-justification (good for PR, investors want it, supports sales of key products) then you should cut it.
Lean businesses scale. Bloated businesses just get more bloated. You will always find parts of your offering that aren’t building towards your goals, and don’t make any real difference at all. They don’t solve the problem, they don’t match your mission, and you’re not sure how the fuck you ended up with them.
Evaluate what parts of your business work and what parts don’t; never do something just because it’s “nice to have.”
Ain’t nobody wants to hear that. But you can’t get away from it. Businesses have to make compromises when they scale? There are two reasons for this.
When you’re small, you can exactly match the needs of a small group of people. That’s very doable. But you can’t exactly match the needs of a large group of people, no matter how big you get.
What you can do is optimise to try and match as many of the needs of as many people as possible. To do that, you’ll have to make compromises.
If X group of people want a feature, and Y group of people don’t, and they make up large enough opposing groups of your market, something’s gotta give. Because you can’t always ship every feature you want and still make sure your product does what it’s meant to do. Simple as that.
Before anyone sends me that Steve Jobs’ “Don’t Compromise” poster with some well-meaning bullshit about the iPhone being perfect, think about this.
The first iPhone didn’t launch with native apps, it launched with the ability to run web apps. That was a compromise.
Don’t believe the hyperbole. Compromise isn’t a dirty word. Work out what’s viable, what’s not, and what version of your customers’ wants you can give them. Don’t take this as permission to make shitty things that don’t work.
Have Managers Not Technicians
Ever read a book called “The E-Myth Revisited?” It’s one of the best books on entrepreneurship my fiance and I own.
One of the lessons is that you can’t grow a business if you want to keep being a technician.
Example, If you’re a graphic designer, you can’t grow your design firm and keep on being a full-time designer. You have to become a manager of other designers.
Businesses need technicians to do the work, but they don’t need their founder to be one of them. They need their founder to be working on growth, to be working on people and to be steering the ship.
When you look at growing a business, you have to think about whether the scale is something you want. If it’s not, that’s okay. There are business owners who love what they do and love keeping it small. But you’ve got to make a call, one way or the other. And you’ve got to remember that it’s not always black and white.
I’ve been working on a scaling strategy for an agency, recently. We’re working on a two-year plan to move them away from being a service-based company and into being a scaling product-based company. It’s a challenge, but it’s doable.
The turning point for the founder was understanding that the business she got into to pay her bills could be an asset and a legacy. That was a shift in thinking, and an important one. When we decided that we agreed on the path to walk down, we celebrated with Bubblegum milkshakes — my current vice.
She told me that for her, the hardest part of scaling really had nothing to do with any of the challenges that we’d discussed.
It was accepting that one day her business would be unrecognisable as the company she originally started. And she was okay with that because she knew it was what she wanted.
That’s probably my last point here about scaling a business.
Businesses don’t scale if you don’t want them to.
- Make plans and stick with them, don’t just hope for the best.
- Scale what you can, and change what you can’t.
- Don’t waste resources when you’re scaling, or you’ll scale that waste.
- Make sure your business can support your scale.
- Don’t do it if you don’t fucking want to.
- If you do fucking want to, don’t do it by half.