So you’ve made the decision to grow your business – congratulations! Now get ready for the next challenge: how to scale a business for growth? Even if you manage to sell like crazy, you’ll soon have another problem: you have to be able to deliver to all those new customers. Scaling a business is simplified through Dream Team Capital…
Scalability is about capacity and capability. Does your business have the capacity to grow? Will your business systems, infrastructure and team be able to accommodate growth?
Scaling a business means setting the stage to enable and support growth in your company. It means having the ability to grow without being hampered. It requires planning, some funding and the right systems, staff, processes, technology and partners. Here are our six steps to scaling a business:
First, and perhaps most obviously, entrepreneurs need to want their business to grow. Many early-stage ventures lack the will and ambition to scale. This is fine, of course, if their dreams don’t stretch beyond building a business to support a certain lifestyle, but more ambitious entrepreneurs need to create realistic growth targets and develop plans and concrete actions of how growth will be achieved.
2. Build broad management skill-sets
Some BBBEE initiatives give percent stakes of their companies to their employees; it takes more than a founder to build a successful business. Though founders have a given expertise, growth requires an expanded skill-set. As such, entrepreneurs are advised to build a team with broad and complementary skills. Business consultants, accountants, bankers or experienced executives could also provide useful mentorship to scale ups.
3. Build collaborations
The growth mindset needs to extend to partnerships with people and organisations outside the business. Entrepreneurs should build a network of partners, such as service providers, sales channel partners, suppliers and customers (who may, for example, be willing to help with market information). Many of these engagements could take the form of formal alliances between the entrepreneurial firms and established companies.
4. Establish standardised processes
Flexibility can be the enemy of growth. It can be hard to admit, but “managing the operations by hands-on involvement of founders will eventually limit growth”. If a start-up is going to scale, managers need to implement standardised and repeatable processes, with proper delegation. This may require investments in purchasing support systems including IT and training personnel accordingly, as well as delegation from the founder and senior management.
Without knowing your core competence it’s difficult to create strategies. Many start-ups have evolved by doing certain things without articulating their core competence. The report recommends that entrepreneurs need to identify and emphasise a company’s core competencies – the unique knowledge that underlies its capability to compete – in order to invest in focused growth.
6. Articulate competitive strength
Many entrepreneurs fail to look at their business through the eyes of their customers, with research suggesting that some founders build a distorted self-perception based on their own definition of the quality of their interactions with the customer. As such, entrepreneurs aspiring to grow their company need to “develop a clear articulation of their company’s competitive strength in the eyes of the customers, and how this strength is related to internal processes and knowledge. This needs to drive an identification of the relevant growth path in a way that allows scaling without leading into a complexity trap.”
These are six factors to consider in scaling a business. Have you encountered any of these issues in scaling your business?
Contact us for further assistance…