The difference between growth and scaling becomes most clear when a company isn’t a startup anymore but is not yet a large corporation. At this critical stage, the business will have to decide between growing at a regular rate or switching over to faster company scaling.
According to Scaleup Nation, a scaleup is ‘an entrepreneurial venture that has achieved product-market fit and now faces either the “second valley of death” or exponential growth.
In business, as in life, there’s no such thing as standing still – you’re either growing or stagnating. And like life, growth in a business can be painful. Because of the costs associated with growth, modern entrepreneurs and business owners have become preoccupied with the idea of scaling.
What is a key difference between growth and scaling?
There are key differences between growth and scaling. Growth is when a business adds new resources such as capital, people or technology. By contrast, scaling is achieved by increasing revenue without incurring significant costs. While adding customers and revenue exponentially, costs should only increase incrementally, if at all.
For instance, a social media campaign may attract 100 new customers but the financial outlay will the same whether the campaign brings in 100 or 50 customers. Another example would be transferring to a cloud business phone system – unlimited calls at virtually no cost.
Unfortunately, there’s no clear-cut path to successful scaling — if there was, it would be much less impressive to build a million-dollar company. However, these top 5 steps will make a positive difference in scaling up your tech company.
1. Invest in company culture
Employees need autonomy; managers need control. This is especially true in the awkward scaleup period. With more people working from home, managers and HR teams suddenly have far less visibility over team members, yet they need to be able to trust that they're conducting business appropriately.
Most startup leaders spend years carefully building a cohesive company culture, and you need to be sure not to let yours slip away during the uncertainties of the scaleup phase. In renewing your dedication to your core values, you will attract the best talent, get the best technology for analysing and managing your financial data and clearly define how to continue to scale.
Related: How to start and sustain a successful Tech Business?
2. Scalable processes
There is an abundance of good scaleup software that will save you time and money not only while you scale up but beyond. Fast and reliable software that everyone can use anywhere will help to decentralise information while centralising control – cloud software such as Salesforce, Dropbox and Hubspot, online payroll tools such as Xero, integration tools such as Zapier, spend management and productivity systems…And don’t forget to document every process.
3. Invest in process management
As a small business owner of a tech company, you probably have direct lines of communication to all your employees. But as your business develops and you need to scale up, good process management means you will need to leave the small things to others.
For them to be able to work effectively and efficiently, make sure that all processes are documented, and that others can pick them up without having to be shown everything step-by-step.
4. Free yourself from the mundane
When you’re scaling, you'll have to let go of most of the little things that eat up your time. If you are a founder or in a leading position, you need to take your eye off small details and focus on the bigger picture.
There are plenty of highly talented people who can do the smaller stuff, and will probably enjoy doing it more than you do. Now you’ll have time and energy for the part of the business that requires your appropriate skill set – the stuff that you enjoy, and that will make your company thrive.
Related: Most CEOs miss these 3 things when scaling their business
5. Focus on core strengths
After startup, it's tempting to believe that a new shiny product or service will unlock a flood of new revenue. New products and services cost time and money to implement – this is growth, not scaling up.
Employees will seek to introduce their own initiatives, leading to confusion and inconsistency. An ad hoc set of decisions and actions will create gaps in your culture and productivity. Successfully scaling requires repeatable and predictable systems that are continually refined and developed. This is how companies got from thousands of customers to millions.
Related: Do Tech Startups need to re-evaluate and adapt due to a shift in Customer behaviour
Have you noticed our #FridayExpertTips... here's one that relates to #Technology
“Be flexible and listen to the market: Even if you nail down the perfect niche, it won’t necessarily remain the same forever. Markets can be fickle. If you can’t pivot and react when the winds of change come, you’ll be blown away.”