Scaling up your business – Part 2

  • In my previous blog (which you can read here) I introduced the 4 steps to scaling up your business. I then described the first two of having a scalable product (one that is teachable to your team, is of value to customers and is a repeatable purchase) and having a scalable infrastructure (Systems, processes and organisation)
  • In this follow up blog I’ll describe the other two steps, having an effective marketing function (generating sales leads to allow growth) and most importantly having a mindset and leadership capability that can handle growth and forward planning.

A scalable product

Imagine your business creates bespoke photography for company boardrooms. And you are the only person in the business who can do that. Once your week is full of work then the business is at its limit. And you probably are tired and stressed! Your business is not scalable. You can probably charge top notch prices for your photography and customers love them. But each customer is unlikely to want new photos every month or year. You need a constant source of new customers.

Take another photographic scenario – doing those annual school pictures. You know the ones. Where there is an individual picture of your child plus another group picture of the whole school or the year group. Not so artistic as the first scenario. Yet it is fairly prescriptive. Those individual and group pictures are pretty standard to set up. Also, as a parent you’ll know that you can’t avoid buying pictures to share across the family, give to grandparents and put up on the wall. Finally  you know these pictures will turn up in your child’s school bag at least once a year for every school year -you can set your calendar by it.

You might have picked up the characteristics of a scalable product?

  • You can teach other employees to do it, standardise the process and roll it out;
  • The product needs to be valuable to customers;
  • The product needs to be something that customers come back and buy repeatedly.

You could take each of your products and rate each one , say out of 5 on how teachable, valuable and repeatable they are.  The top scoring products are candidates to plan for scaling your business.

One consequence of scaling up with the best product(s) is that it should create a wholesale shift in your business from selling lots of things to a few people to selling only a few things to lots of customers. As a by-product you are less reliant on a single or small group of customers.

One summary message I share with other business owners is to grow where you are planted. That means sticking to businesses and markets you know best. This approach shortens learning curves and makes best use of those years of experience and knowledge.

A scalable infrastructure

As organisations grow they find they need to segment into different parts, more often to specialise in different functions within the organisation. Here’s where complexity can be the blocker to scaling up. As segmentation and specialisation increases there is more risk of those segments being too distant from each other – physically but more importantly in terms of shared thinking and communication. In parallel, information can be messed up – you know: duplicate records, stand-alone information sources, different reporting, etc.

This growing risk of complexity will drive how you structure your organisation and establish accountabilities. This is where a scalable infrastructure becomes critical. Here’s a few practical examples:

In a 2-10 employee business you may need a better phone system to transfer calls around the team or to think about office layout to encourage teamwork;

When you are approaching 50 employees then you’ll be thinking about your systems for accounting, stock control, sales, work scheduling, etc – looking for a joined up approach and systems that can grow with increased sales, customers, staff, etc.

When you are heading into 100’s of employee then the systems challenge and integration is even more important. Equally the culture and management structures become critical to encouraging growth.

A effective marketing function

Probably the top functional barrier to scaling up is the lack of an effective marketing department separate from sales.  There are mountains of books and experts focused on marketing so I won’t attempt to summarise the extent of their advice. Instead, here are a few reminders:

Marketing must determine the right WHAT you should be selling to the best WHO and HOW you should sell at the right price. That’s a challenge in itself and needs careful thought.

As the boss you should be spending at least one hour a week to focus on marketing. You need to contribute to a compelling vision and elevator pitch for your team to work with.

Be on the lookout for market trends. Markets can be cruel or kind. Market timing has been found to ‘trump’ all other scale-up factors. Remember Blockbuster and the demise of video rental shops. Equally look at the growth of Facebook on the back of technology and the new concept of social media.  If you can catch a wave of growth in one of your sectors or products then look to ride that wave.

A scalable mindset and leadership capability

Having capable leaders in your business, no matter how junior, can be the launchpad for sustainable growth. Again, there is an enormous amount of advice out there on leadership. Here’s a few takeaways to ponder:

Prediction: as business owners we think we need to know all the answers including where markets are going. Rest easy, you don’t need to be years ahead, just ahead of the market and your competition. The key is frequent interaction with customers, competitors and employees. This is difficult to do as you scale up but beware losing contact and becoming isolated so you lose your gut feel for the market and your business.

Delegation: plain and simple – let go and trust others. This is challenging. When you have 3-10 in your team then you should look to delegate activities you are weak at. When you have 10- 50 in your team then you should delegate activities you are good at – like general management or sales.

Repetition: its your job as the business leader to ‘keep the main thing the main thing’. Keep the business focused and on message so that everybody is heading in the same direction. Otherwise, your scaling up is going to be much harder. Encompass consistency. Finish what you start. Mean what you say. Consistency is an important part of repetition. You must deliver frequent messages and metrics to reinforce business culture, core purpose, goals and priorities.

Scaling isn’t linear

Scaling up your business isn’t a linear thing – there can be growth surges then plateaus. Employee count can be more reflective of the surges and plateaus:

1-3 home based 8-12 Leaders & helpers 40-70 First hierarchy 350-500 Middle management 2500 – 3000 multiples of hierarchy

Companies with an employee count between these natural clusters are likely to be feeling stuck in that :

  • It takes a long time to do things;
  • Previous problems come back;
  • Feeling big but not big enough;
  • Leaders stressed;
  • Caught up in minor decisions.

I will point you back to the 4 themes above when you feel you are stuck on a plateau.

Are you ready to scale up?

Scaling up your business is exhilarating, fulfilling and reward but can be a nightmare. Scale does not always make things easier. It can be harder and more complicated. When you remove the 4 barriers of product, leadership, infrastructure and marketing then rather than a dragging anchor holding you back, you have a wind at your back propelling you faster.

If you are a service provider it can be hard to think about creating a scalable product. Creating your service as a standard product is the route to follow. When it is standardised it is easier to teach new staff to sell and deliver. It is also capable of being a repeat purchase item that is valuable to your customers.

To find out how to productise your service follow this link to get your free eBook, How to Productise your service in 8 simple steps:

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