Scaling a business can be an exciting time. It means growth and expansion. It also means new opportunities, increased revenue, and a larger customer base. Scaling has its own set of challenges, as well, and with warning signs in the economy everywhere, the environment poses even more challenges.
4 main challenges to scaling a business:
Lack of Resources
Scaling a business requires a significant investment in finances, human resources, and technology. Company leaders who have the mindset of scaling are always thinking about these investments and how to use them to create a more sustainable business. As a company leader, you know the importance of having resources available, so you can always be ready to pivot to a stronger position with innovation, good talent, and new products and services.
To support growth and expansion, you need a good handle on managing your resources. Maintaining a healthy cash flow, having potential borrowing capability, and attracting new talent are critical. You also must know what expenses are essential and how to minimize unnecessary expenses.
Managing a More Complex Organizational Structure
With growth comes changes to your organizational structure. Specifically, you will need to learn how to manage a more complex organizational structure. Not only will you have an increased workforce, but new product and service lines will likely create new departments. Expansions might include adding new demographics, sometimes nationally and sometimes internationally.
Your strategic plan should take into consideration how to effectively coordinate, communicate, and make decisions during this complex time. For example, it can be a very confusing time for employees and customers to know who to go to for questions and where that contact is located. Clarity is necessary. Additional training may also be needed to help provide general information and direct people to the proper contacts.
Hiring and Retaining Good Talent
Research has shown that talent is a primary challenge for growth when scaling. Your company needs to quickly ensure that there are the right people and systems in place to withstand the speed at which you are growing. Without them, the business could quickly fall apart.
Efficiency is what separates scaling from mere growth. Hiring the right talent at just the right time can do wonders to improve your performance. It can also create challenges when good talent gets frustrated and discouraged because they encounter problems of scaling. In addition, new management can have an impact on employee performance and morale.
You want to ensure there is clear guidance for responsibilities, accountability, and performance. Since managing the timing can be tricky, some companies might find it prudent to outsource work and training. Consider this carefully as it could affect your brand.
Maintaining Company Culture
As a company scales, one of the biggest talent priorities is how to maintain culture. The underlying beliefs and values shape the company. When you scale from tens to hundreds and thousands of employees, it is an important time to clearly communicate the company’s vision and values, prioritize engagement and ensure consistency. Be prepared to clearly exemplify and relentlessly reinforce the behaviors you want to see, since different people have different meanings for terms such as “respect”, “hard working”, “drive”, and “innovation”.
While challenges always exist for companies during any stage of their growth, leaders who rely on a strategic approach when scaling a business often become more attuned to the needs of the company, especially with their brand. They learn to face challenges in scaling head-on, keep moving forward, and often find that these are their best years.
Natasha Davis can help you un-complicate the journey to scaling business and mobilizing a brand. Contact her to get started.