The good news for businesses scaling up is access to connectivity, cloud-based tools and a global market has never been better. But there’s still a lot to consider.
For many businesses, COVID-19 has thrown all the puzzle pieces into the air. Some are closing their doors for good. But while GDP has fallen in many countries and unemployment is rising, other businesses are expanding rapidly, like those in healthcare, food delivery and digital services. Others still have had to offer services online for the first time.
Scaling up a business has never been easy. You’ve heard of start-ups, and if all goes well, start-ups become scale-ups – defined by the OECD as any company with 10 or more employees that’s grown at least 20 percent in the past three years.
If you’re on that road already or considering it, there are reasons to think carefully and seek the best possible advice. South African venture capitalists and scale-up experts 10X Entrepreneur put any business’s chance of succeeding on the path to scale at just six percent.
And yet, the opportunities for businesses to scale up are more instant today than they’ve ever been, thanks to easier access to ever-increasing connectivity, a global market for employees and consumers and cloud-based tools. New cloud-enabled ways of running your IT side of things, like Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS,) are making it much easier to grow your business as and when you need to.
Your cybersecurity is just one thing you need to consider as you scale your business.
Should you even scale up?
The most common mistake when scaling up could be not how you do it but choosing to scale at all.
It’s easy to assume success in business means taking on new staff and going into new markets, but there are other ways to make more money, like offering a more premium product at a higher price.
In their 2020 book Unscaled: How AI and a new generation of upstarts are creating the economy of the future, venture capitalist Hemant Taneja and tech writer Kevin Maney say new technologies are turning the old rule ‘bigger is better’ on its head. The impending climate emergency also places the importance of keeping a check on emissions while a business grows.
If you know you need to scale, then there’s the matter of when. Palo Alto Software’s free entrepreneurship advice resource BPlans lays out five signs that say your business is ready to scale.
What do the experts say about how to scale?
Chief among scaling up expert consultants is Verne Harnish, founder of the Young Entrepreneurs’ Organization (YEO) and author of Scaling up: How a few companies make it…and why the rest don’t.
In the complex land of scale-ups where business leaders must constantly learn new things, Harnish’s advice is attractive. It’s easy to follow and based on observing hundreds of real companies that have succeeded, and more importantly, those that failed.
Harnish’s advice might surprise when you’re envisaging a big and bold business future, because it’s full of caution. He advises, for example, don’t go too fast, use focus to prevent overwhelm and avoid saying ‘yes’ to everything customers want.
Harnish also highlights why you shouldn’t mistake management for leadership (leaders shouldn’t try to handle all the functional roles as their company grows, he says) and the importance of making sure your infrastructure is scalable from the start.
Wagepoint’s Shrad Rao has pulled together advice from household-name scale-up success stories. Several successful businesses – such as Google, Zappos and The Container Store – have taken to heart the value that employees should drive the company’s vision and direction. Rao also points to Steve Jobs’ view that far too many leaders of growing businesses are afraid to ask for help. Vincent Mifsud, CEO of ScribbleLive, says it’s vital to make sure you’re gathering and following the data when it comes to making decisions on where and how to grow.
How is COVID-19 affecting businesses scaling up?
UK Predictive analytics software providers Bellrock have talked about their experience as a tech business scaling up during the pandemic. They believe that despite the new distance between their remote-working staff, they’ve seen their team spirit galvanize and colleagues become closer. It’s meant they’ve been even more effective, delivering in “shorter, more compressed bursts than we’ve seen before.”
It makes sense that Bellrock has seen signs of greater work satisfaction in their employees, manifesting in closer, more effective teams. Recent research commissioned by Kaspersky found 74 percent of small- to medium-sized business employees want to see a rethink of pre-COVID-19 ways of working, mostly because working from home is giving them more time with family and saving them money.
Audit and accounting services firm BDO Australia points out that businesses can use the incentives, loans or accounting leeway some governments offer because of COVID-19 to grow their business or explore new areas. Business change advisory firm McKinsey Accelerate points to the way many businesses successful in adopting a ‘pivot’ in response to the pandemic. A pivot is a radical and rapid change in how they do business. McKinsey Accelerate also suggests some leadership attitudes that will help bring employees along for the ride.
If your company’s time to scale has come, the pandemic needn’t hold you back. There have never been more digital resources available to you that can help, such as cloud-based software and scalable infrastructure. But scaling up always needs careful consideration. Expect your role as a leader to change, and put your people at the center of your plans for growth.