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Successful startups don’t remain as one- or two-person operations running out of a home office forever. As demand for your product or service grows, so too will the need to scale your business. Business growth is an exciting time — I know because I’ve experienced it firsthand!
But while achieving rapid growth is an admirable goal, scaling can also prove to be a significant challenge for startups. In fact, studies have found that 74 percent of startups fail because they scaled prematurely or weren’t prepared to scale. If you want to make sure that your goals of rapid growth don’t cause serious problems for your startup, be sure to prioritize these common areas of concern:
1) Growing your team
You can’t do it all on your own — trust me. Whether you plan on hiring more people to work in your office or building a remote team, bringing the right people onboard is crucial for successful growth. You have to be willing to delegate if you want to grow.
While scaling your startup will necessitate a transition to hiring people in more specialized, rather than generalized roles, it is also important that you continue to emphasize culture fit in this process. This means bringing in people who understand what it is like to grow a startup and are willing to work in a more flexible environment that is subject to future growth and change.
As the Harvard Business Review notes, “A 2005 analysis revealed that employees who fit well with their organization, coworkers, and supervisor had greater job satisfaction, were more likely to remain with their organization, and showed superior job performance.”
2) Balancing marketing and infrastructure
Marketing tends to receive a heavy push during periods of rapid growth — but can the rest of your brand’s infrastructure keep up? Many startups struggle when marketing creates more demand for the product or service than the brand is equipped to handle.
When this happens, areas that are vital for retention, such as customer service and product quality, can suffer. You cannot ignore how increased demand could put strain on other areas of your startup.
By planning for how other departments will handle the additional workload, you can ensure that core processes like programing or manufacturing will be able to keep up with your marketing efforts.
3) Information technology (IT)
When your infrastructure starts to grow and you have more manpower (and computers), it becomes increasingly difficult to keep your devices properly patched and secured. This not only puts your security at risk, but can also make it harder to achieve your business’s KPIs. If you’re not careful, an unsecured device could compromise your entire network.
One workaround I’ve found to be helpful comes from tools like Cloud Management Suite. This cloud solution allows you to manage IT remotely, automating key tasks like patch management or software deployment. By automatically deploying patches when security updates are issued, each device on your network will be safe from data breaches and other security compromises.
Enhancing endpoint security and IT management keeps company tech running smoothly at all times. By reducing the overhead and risk for security breaches associated with your expanding technology needs, you can keep costs down while also improving your team’s efficiency.
4) Cash flow
It costs money to scale your startup — and if you don’t monitor your finances closely, you may run out. Maintaining a positive cash flow while scaling will ensure that you don’t spread your resources too thin. Remember, cash flow refers to how much money is actually in your brand’s accounts — not the profit margin.
Your cash flow is how you will pay your employees, make monthly rent payments, and obtain any materials or services needed to run your business. Fully understanding where your money is coming from (and where it’s going) will help you keep you introduce new expenses in a way that won’t cause significant strain on your finances.
5) Streamlining company processes
A period of growth typically means that you will add new employees, departments, and processes to your startup. However, you don’t want your company to get bogged down with redundant or unnecessary systems that reduce your brand’s efficiency and agility.
As Bob Sutton, organizational behavior expert at the Stanford School of Engineering, has explained, “Scaling is actually a problem of less … There are lots of things that used to work that don’t work anymore, so you have to get rid of them. There are probably a bunch of things you’ve always done that slowed you down without you realizing it.”
Don’t merely focus on what you will add as your startup grows; give equal attention to processes you can eliminate or streamline to keep your team operating at peak efficiency. Don’t be afraid to abandon practices that aren’t working or are no longer relevant.
6) New competitors
As you start to grow, you must be prepared for new competitors to enter your space. No matter how unique or innovative your company may be, you can be sure that others will seek to leverage your weaknesses in an attempt to grow their own business.
You must be cautious in how you respond to these new competitors …
Rather than become obsessed with what your competitors are doing, a better long-term strategy is to focus on your unique value proposition. Identify what sets your brand apart and strengthen your core messaging so you can continue to connect to your target audience.
Safe growth for the future
Whether you’re building a SaaS platform or a consumer-oriented product, how you approach scaling and growth will make all the difference for your long-term results.
By addressing these areas of concern before you dive into scaling your marketing and growing your brand, you will be better equipped to face the challenges and opportunities coming your way.This post is part of our contributor series. The views expressed are the author’s own and not necessarily shared by TNW.
Published April 11, 2019 — 18:16 UTC