It’s logical to think that success would breed more success, but the business world isn’t always logical. Just because a business has proved to be successful at one level, that doesn’t mean that they’ll be just as fortunate when they try to reach the next level.
The fact is, scaling actually breaks more businesses than it makes. With that said, there are ways for a business to increase its chances of reaching the next step. Most businesses that fail because of scaling do so because they failed to take the necessary pre-growth steps. Once they’re operating at that higher level, structural flaws become more pronounced.
They Hire People Too Quickly
A rush in growth can be manageable if you have the right people in place, and a disaster if you don’t. All too often, businesses experiencing growth elect to hire people as quickly as they can, rather than taking the time to hire the right person. Not only can rush-hiring impact quality, but it’s also an expensive mistake to make. The best approach is to clearly define the roles you need to hire for, and put together a recruitment process that you can replicate again and again.
They Overlook Cash Flow
Many businesses choose to scale when their revenue is solid and/or growing.
But scaling also brings with it additional expenses, in some cases a lot of new expenses, and that can severely eat into your cash flow if it’s not managed correctly — and potentially even result in business failure if the damage is serious enough. Given how crucial strong cash flow is when scaling, it’s recommended to work with a business management consultant to help prevent issues before they have a chance to materialise. They’ll help put together cash flow strategies that can provide the stability you need to grow your business with confidence.
They Start Chasing Every New Opportunity
Scaling a business can sometimes result in new opportunities coming the business's way. However, while being presented with new opportunities can feel like a good thing, actually pursuing them isn’t always the best strategy. Some businesses get wrapped up in all the possibilities of what could be, rather than focusing on what actually is. The business strategy that got you to the level where you can now scale should be where the priority is.
They Retain Their Early-Stage Systems
The systems that supported a business’s growth in the early stages may not be suitable for when things are bigger than ever before — and that’s difficult to manage when you’re in the middle of things. It’s recommended to create scalable systems before you drive towards growth, so that you can be confident that your systems can grow alongside you.
The Culture and Vision Become Diluted
As businesses grow, it’s possible that the culture and vision that drove the business forward in the first place become diluted, especially if the number of employees grows significantly. Clearly defining your company culture beforehand can ensure that you always have your hands on the wheel.
