Scaling any business comes with unique challenges that must be navigated along the way to achieving … [+]
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Getting past the first major growth hurdle with your business is an amazing feeling, but it can be a little unnerving at times, too. When initially slow growth turns into an explosive jump in new customers, many first-time entrepreneurs can find themselves in a position of not quite knowing what to do next.
Many businesses don’t capitalize on the momentum they’ve built (or have been given). Scaling successfully is an art, and if you’ve never done it before, there will be lessons to learn along the way. Maybe you’re working too many hours and burning out by trying to do everything on your own. Perhaps you’ve hire too many or too few employees. Maybe your tools and processes that used to work with a smaller business are beginning break under the strain of a larger customer base.
Whatever the case is, you’ll almost certainly need to change some of the ways you do business as your company scales. As McKinsey notes, it’s extremely hard to grow a large business—as only 28% of the high-growth companies it surveyed were eventually able to break $100 million in annual revenue, even with exceptional fundamentals.
To shed some more light on how to navigate these challenging growth pains, I reached out to a few experienced entrepreneurs who’ve scaled businesses of their own, to get their take on things. Here’s what they had to share.
1. Be Yourself
The way you do business may change a bit, but the principles you founded your company on shouldn’t. If you lose authenticity you’ll lose your core customers — because they want you, not some idealized version of what you and your company look like. Don’t make the mistake of thinking that just because you’re bigger, you need to be corporate.
“Stop trying to be the version of you that you think your clients want you to be,” says Stacy Havener, founder and CEO of Havener Capital Partners LLC. “Stop saying what you think people want to hear—say what’s in your heart instead. You’ll be amazed at the tribe you find, and overwhelmed by the love they give you. In turn, you’ll help them beyond measure, and you’ll keep helping them over and over again.”
A lack of authenticity with who you’re trying to be as a company, will likely lead to your customers eventually noticing that your actions don’t align with your values. Throughout your growth journey, strive to stay true to who you are and continue advocating for practices that support the mission of your business.
2. Invest In Your People
People are the foundation of any successful business. Having a good team and a strong customer focus will carry you far when you’re trying to scale quickly. If your team is good and they care about both each other and the values of your company, it’ll translate through into the care they show in turn.
“From mentoring employees to choosing the right customers, people are the most important part of your business,” states Andy Klump, CEO of Clean Energy Associates (CEA). “Investing significant efforts in recruiting A-players at an early stage is an absolute requirement. As we’ve expanded, CEA has greatly benefitted from having a clear purpose, vision, values and reinforcing it with the team.”
Studies have shown that many people now change jobs every three to five years, which can be a relatively disruptive new reality if you lose a key player in an important role at your company. Give your employees a compelling reason to stick around and your customers will often last longer, too.
Like it or not though, it’s not only the people on your team and your customers you have to think about. Getting the right mentorship for yourself matters, as well. “In the case of CEA, I grew my headcount from 10 to 50 team members in a three year period because I was helping one of my core customers solve a complex business problem from China,” Klump adds. “He mentored me and helped CEA grow in many ways which also benefitted his business as well.”
Choose the voices that influence the direction of your business with care, both inside and outside the room. That’s doubly important as you try to scale your company.
3. Use Technology Effectively
Are you using technology to decrease your workload? If not, you’re going to have a hard time scaling at all.
“I got to ask John Pestana, co-founder of Omniture, about scale on our podcast, Innovation & Leadership, and his answer was incredibly simple,” says Jess Larsen, chairman and managing director of Graystoke Investments. “He said they had been making websites and were doing well but working a million hours. Their friend came to the office one day and bragged that his business was making money while he slept. John decided that’s what he really wanted, and it became their north star as they built Omniture.”
Technology is a growth driver for companies both big and small. As small businesses scale, they’ve seen big returns from social media platforms like Facebook. Larger businesses can use customer relationship management tools, product information feeds and supply chain management software to streamline their processes.
Larsen appreciates how Omniture leveraged technology to scale their business. “They designed the business so that it had something not just better, but truly different to offer—and it would allow people to sign up online without his team personally being present. Also, the system would deliver the service to more and more people without needing to hire additional staff at a linear rate.”
Omniture was able to grow its revenue so much faster than its expenses, that they eventually sold for $1.8 billion to Adobe in 2009—and it’s partly because they embraced technology to scale their business without subjecting senior management to overworking themselves.
4. Focus On Experience
“No matter what, focus on the experience. Remember that what you offer to the world is an experience. It’s the one thing that can’t be commoditized, whether your company makes a great product or you are serving people,” says Ben Laws, co-founder and CEO of Evexia Wealth, an investment management and wealth coaching company.
People don’t buy Tom’s shoes, shop at Walmart or eat at Chick-Fil-A just because it’s the closest or most convenient thing. They most often do it because of the experience, and one of the biggest challenges of scaling a business is retaining that important experience as it grows.
“Experience is what makes people come back for more,” Laws adds. “Let the right people and solid processes of your company create a consistent customer experience and you’ll already be scaling.”
Think about what sets your business apart. Your customers should have a distinct understanding of what makes you different and unique—that shouldn’t change as you scale.
Scaling a business is a unique challenge, but the right advice can make it easier. Make sure you’re taking advantage of these tips to capitalize on your momentum and ride to a bright future for your company.