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Business Scaling the Right Way: Mistakes to Avoid

Business Scaling the Right Way: Mistakes to Avoid

After the initial stages of establishing their businesses, most entrepreneurs think about scaling. However, like most aspects of business, scaling doesn’t come without its challenges. There are a myriad of unforeseen difficulties that force you (as a business owner) to make very tough decisions.

To ensure that you don’t repeat the mistakes that many startup owners make when they try to scale up, here are five errors you should be aware of.

Poor Planning Process

When a business shifts status from a small organization to a big corporation, there are a lot of areas that will have to change. If you have 3-5 employees, you probably know them on a personal level and know exactly what they are doing at any given moment. If you were to launch a new product, each employee would already know exactly what they should be doing.

When you begin to scale up, things might change drastically. You’ll start to oversee 10-50 employees and managing them will be complicated and exhausting, especially without help. For your planning and administrative work to run smoothly, you have to integrate solid systems.

Have a plan for the months and years ahead of you, and predict growth, as well as market changes and forces before they happen. Taking action without a solid plan may cost you a lot of resources down the road and will ultimately prove detrimental to your business growth.

Scaling Too Fast

Many business owners tend to believe that scaling a business very quickly is the best recipe for success. This is not always the case. If you don’t move everything along at a steady pace, the whole scaling process can prove to be too much, too soon. Nothing about scaling a business should be done so fast that you skip analyzing every aspect of the process.

Taking Too Much Debt

Debt can be a strategic tool for scaling up, but it is not something that a business should rely on. Many start-up owners have relied so heavily on debt to scale up their businesses that they unknowingly handcuffed themselves and compromised future flexibility.

Instead of taking on more debt, consider bartering. If you are in the B2B space, for instance, you can offer your services to another company in return for theirs. Building such networks can help you lower your overhead expenditure and prevent you from taking on excessive debts. Of course, this cannot be done in every industry, but it is a valuable strategy that can apply in many situations.

Over-focusing on Sales and Marketing

When you are over-focused on scaling, you are likely inclined to spend most of your resources on sales and marketing because it is the most practical way to gain customers. However, this can cost you dearly in the long run. When you primarily focus on sales and marketing, you may neglect your valuable customers. Customer service and innovation all take a backseat, and errors in your products fail to be fixed on time. The result is a poor customer experience that derails any scaling progress that you make.

Not Listening to Early Users and Adopters

The first people you need to listen to are early users of your products. Your first beta-testers may have gotten your products for free, but they can give you invaluable feedback on areas that you need to fix while also spreading the word to their peers, who may end up becoming your loyal customers. Another important group you ought to listen to is the early adopters who are looking to solve certain pain points and are lining up fast to pay the full price for your product. Only after hearing from these two groups and incorporating their suggestions should you scale certain aspects of your business, like rolling out a new product to a pool of potential customers.

Bottom-line

When scaling up a business, it is crucial to anticipate future challenges so that you can take preventive measures against them. Beware of the above-highlighted mistakes. By avoiding them, you will be able to scale effectively and successfully; and if possible, partner with mastermind companies—you will benefit from free business analysis as well as get an ample opportunity to learn from other businesses’ mistakes so that you don’t repeat them in the future.


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by Rebecca Jones // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.