One of the key aspects of scaling your business is hiring the right people. People who can grow 10x. … [+]
Scaling a business is no easy feat. It is a strategic growth strategy aimed at increasing revenue and profits without increasing operational costs. For entrepreneurs, small business owners, and startups, it is an exciting prospect that requires careful planning, risk assessment, and innovative thinking to materialize the vision into a sustainable reality.
Pivoting isn't just something people do when they're looking to change jobs. Companies also pivot when they're in a growth phase.
Entrepreneurs are often told to think big, but in the business world, it's just as important to think smart. At the heart of any successful expansion effort is a strong financial mindset. Whether you're just starting out or your business has been around for years, your attitude and approach to finances can be the engine that drives your growth or the brake that stops your progress.
For example, Yasmin Moaven, COO and CMO at fintech company Pipe, said in a phone interview: “The venture capital space has boomed over the past five or six years. There's been a lot of capital coming into the market. As a result, companies have access to more capital and in some cases they may have raised more capital than they needed. So they start growing at all costs. They grow and grow because they have access to capital. But over time, it can be hard to think about whether that growth is aligned with your business needs. A lot of times, it comes down to a question of do you want to be the winner in the market or own the largest market share? But that doesn't mean that the market was sustainable.”
A financial mindset to scale your success
A solid financial mindset for expansion includes elements like resource allocation, investment readiness, and spending foresight. It's knowing when to take calculated risks and when to limit losses. Cultivating this mindset is fundamental. The preparation step will ensure your business is prepared to handle the complexities and demands of expansion.
Resource Allocation
Good management of resources is essential: time, money, and human capital. To grow, you need to prioritize what's important, but not necessarily urgent. Invest in tools and systems to streamline processes, optimize your workforce, and grow your market presence. But don't overdo it. It's all about finding a balance.
Investment preparation
Scalability often requires investment – in technology, marketing, talent, and more. Evaluate your business's investment readiness. Is the foundation strong enough to support growth? Is the ROI clear? Evaluate opportunities and be prepared to make decisions with long-term growth in mind.
Yasmin Morven, COO and CMO of Pipe
Effective Scaling Techniques
Once your financial mindset is aligned with growth, it's time to implement strategies that will take your business to the next level.
- Technology is a game-changer for scaling. It enables automation, data-driven insights, and access to a wider market. Use customer relationship management (CRM) systems to strengthen customer relationships, adopt cloud solutions for efficiency, and use analytics in decision-making.
- Your marketing strategy needs to be adaptive and responsive. Understand your market and adjust your approach to meet changing needs. Leverage the flexibility and unmatched reach of digital marketing. SEO, content marketing, and social media strategies can help you grow your brand's presence without skyrocketing costs.
- Innovation isn't just about products. Process innovation is just as important. Look for ways to deliver value more efficiently. Streamline your operations, redesign your production methods, and reduce overhead where possible. Scaling may require an entirely new “how” before you get to the “what.”
- Your company culture should support growth, not stifle it. Build an expansion-minded team where innovation is encouraged and change is embraced.
- Scalability means being able to grow your business efficiently without everything collapsing, so make sure the structure you put in place can accommodate your next expansion phase.
- Leverage the expertise and resources of others through strategic partnerships. Whether it be joint ventures, co-branding opportunities, or outsourcing non-core functions, these alliances allow you to enter new markets or enable new capabilities and gain scale without the need for large upfront investments.
Investing in human capital
Morven has dedicated her career to helping startups scale their businesses, and what she's found most important is the people they hire. She's worked with organizations that have scaled from zero to one to five to 50 employees.
The people who work for you are one of your most valuable resources. Invest in their development, create paths for advancement, and make sure you have the right people in the right positions to support your growth. Your human capital plan needs to be as strategic as your financial and technology plans for scaling.
The hiring process when scaling can be stressful, but it's essential to hire 10xers (startup lingo for hiring people with unique skills) – people who bring 10 times more value to the company than their peers.
In Moaven's experience, it's important to seek out more senior talent during this time, especially those who aren't bound by the rules. These people are looking to step up their efforts, identify threats early, and improve their teams.
“10xers understand that goals are fundamental, but they don't worry about them because ultimately they want their product to come to fruition and be successful,” Moaven continues to explain. “These types of people want to achieve more than their goals.”
Morven warns of a pitfall: It's easy to connect with someone over Zoom during an interview and think their skill set will fit with your company culture. But just because you click with someone once doesn't mean it'll work in the long term. There should be regular check-ins and touchpoints to ensure new hires have what they need to complete projects.
She concludes: “You need to be transparent early on and have almost everyone in almost every meeting or at least have some context. You need to understand your vision and surround yourself with advisors who understand the company's vision as clearly as you do, so they're an extension of you.”