Scaling a business carries a host of potential pitfalls, as I know from my own experience after closing a £50m funding round two-and-a-half years ago. Where there’s growth, there are inevitably growing pains - but many can be avoided with the correct planning.
Start-ups, even well funded ones, need to conserve cash and spend smart. Plus you don’t want to lose your speed and agility as you grow. Here are some of my top tips to successfully scale a business.
1. Get your spreadsheets out
Gut feeling is key, but knowing the potential full cost of your decisions is important too. Running out of cash before a milestone is reached can destroy your ‘baby’, or at least take it away from you. You need to stress test scenarios - don’t assume you’ve properly forecasted all your costs and customers. What happens if the price of your biggest input goes up? What happens if it takes double the time to bring a product live? You may not need to plan for the worst circumstances, but you need to understand the full range of potential outcomes.
2. Grow people from within
Make sure that those taking on people management roles know how to do it. It’s too easy to think that just because you know how to do something that your team does too. Keeping the opportunities flowing at a small company is important too. When expanding a team, consider promoting the best in the team to manager. That’s one way to make sure that experience of where you’ve been and how to interpret the culture is spread throughout your larger organisation.
3. Hire people from without
Admit when you are missing key skills within the company and be open to help from those that have done it before. However, when hired, make sure they are flexible enough to think about how their new position is different from the one they had before. Coming into a start-up and joining a well-established team as an outsider can be daunting and humbling, but if they know they are appreciated and welcome, team integration will be successful.
4. Remember where you’ve been
We review our progress against key stats with the entire company once a quarter. It’s always a morale boost for people to see how their hard work has paid off and to remember how far we’ve come. Celebrating milestones keeps up momentum and engagement. Also think about having a bell or alarm that the sales team can ring when they close deals. It may sound corny but it works: everyone stops their work for a few seconds to celebrate the success.
5. Focus on the future
Don’t let the day-to-day running of the company mean your leadership team is too busy to consider the future. Learn lessons from mistakes, consider re-organisations when necessary, listen to customers, and be mindful of the market. Remember what the end goals of the business are and ensure that all boats are rowing in that direction.
6. Take responsibility
Lastly, remember that you need to be responsible and accountable for all decisions. Nothing should ever just ‘happen’ – everything should be a result of conscious decisions about your people, products and processes.
Growth is a balancing act, deciding which department needs the most investment and what the business priorities are. There will be mistakes, which the management team must take responsibility for. But the key is to learn from them and move on - onwards and upwards.
Dana Tobak is founder and managing director of gigabit broadband provider Hyperoptic.