I understand that as a business owner, you have many aspects of your business to focus on. That said, one of your main concerns should be your scalability .
This word can be scary. You may not fully understand what it means, but rest assured: this is the case for a large number of leaders.
Your scalability is your ability to maintain good performance as your business grows. This is a good goal to aim for because it means you have the ability to attract the right talent, the right investors, the right customers and, when the time comes, the right buyers for your business.
If your business is scalable – that is, capable of growing – a bank will be more likely to grant you a business loan .
Here are eight things to consider to improve your scalability.
1. The weakest link: Surround yourself with the right people
I know you've heard this phrase a million times, but it's still true: a chain is only as strong as its weakest link.
To succeed, you need to surround yourself with a highly motivated and competent team. This will not only compensate for your weaknesses: it will increase your strengths.
When selecting your leadership team, strategically and carefully choose people who:
believe in the company and its product;
are flexible and innovative;
are humble enough to understand that no business is built on one person.
Make sure you put the right people in the right positions. Your lead programmer won't necessarily make a talented CTO.
2. 20/20 Vision: Focus on the Right Opportunities
Successful companies are champions in their field. They got there through their meticulous product-centric approach—by doing one thing…extremely well. They ignored seemingly attractive opportunities to focus on what they do best.
3. One message: everyone on the same page
Every person in the company needs to convey the same engineer database message. However, you need to make sure that it is not a mask behind which lies a completely different reality. Everyone needs to believe in your story and you need to put your words into action.
Corporate culture matters . It starts with the leadership team and flows throughout the organization.
If necessary, hire a consultant to help you formulate your messages. He or she will help you:
create your marketing messages;
stay true to your vision;
attract the right type of customers;
reduce staff turnover.
4. Infrastructure: Are your systems and procedures scalable?
Can you use current methods to grow your revenue from $100,000 to $500,000? Or to $50 million or even $5 billion? Certainly not.
But you need to have a plan for building that next level of infrastructure without abandoning what's in place. A plan that gives you enough latitude to build the next level. A plan that specifies the resources and people needed at each stage of your development.
5. Know when to leave: non-essential appointments
The business must be able to function without you. Once you have created it, you must rely on your management team to ensure its smooth running. Members must have the autonomy to make their own decisions: hence the importance of carefully selecting your team.
I advise my clients to take deliberate leave (two weeks at a time, not just a few days) to distance themselves from the business and force their team to develop autonomy.
6. Margins: The higher the better!
Scalable businesses have profit margins of over 50%, require only a few support staff, and have highly automated operations. Investors, venture capitalists, and banks love these types of businesses.
7. Openness: Stay open to new ideas
Your business must be open-minded and continually improving. Stay up-to-date, or use your 20/20 vision to be at the forefront of your industry.
By ensuring your company has a culture that constantly pushes it forward, you will retain top talent and stay ahead of your competition.
8. Listen: Pay attention to your investors and advisors
If an investor or advisor is concerned about your ability to scale, listen to what they are telling you. First, make them understand your business model , then listen to their concerns.
Typically, investors are hoping that you can fix the problem so that they can provide you with the funds and resources to support you. Pay attention to where the information is coming from: if these people have worked with several successful companies over the years, there is most likely some truth to what they are saying.
Build a great business!
These are just a few notes about scalability that can serve as a starting point for your thinking and further discussion with your advisory board.
In conclusion, building a business that can scale is a huge task, which is why not everyone is able to achieve it. But that shouldn’t stop you.
Think big.
Aim big.
Plan big.
You could end up building a multi-billion dollar company.
