How does your business grow? While growth is good, too much too quickly—or going about it the wrong way—can actually slow you down. Today, we’re sharing some best practices on when to scale your business and how to do it.
Don’t Scale Too Early Or Too Fast
The most important part of scaling is timing. Out of startups that fail, 70% of them fail because they tried to scale too quickly. We get it. You’re excited to grow, awesome stuff is happening, your customers love you. But when you scale too fast, your burn rate is too high, your runway is too short and your company becomes less flexible..
Hiring new people, renting fancy office space, wining and dining big customers takes money and makes it harder for you to pivot if you need to. None of those things are bad in and of themselves, but focusing on making sure your product or service fits your market and that you have a sustainable model is more important in the early days.
Hire The Right People
When the time does come to hire, hire people that fit your business. Don’t try to fit your business to your hires. Some people just aren’t going to cut it. They may seem perfect with all the experience and charisma, but for a startup, enthusiasm for your company, a willingness to be a changemaker, and an ability to take calculated risks may be more important than a big personality or lots of on the job experience.
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Michael Alter, CEO of Tie Bar, recommends that when you do make a bad hire that you remedy the mistake quickly instead of letting the wrong person stay on board. It’s bad for your business, and it’s bad for the employee to be in a place where they don’t fit.
Keep in mind as well that candidates with impressive work portfolios come with a big price tag. Sometimes hiring high potential people (think recent college grads who excelled in classes or internships or qualified people who are looking for a career change) is better.
Set Up Systems And Automation
This part is boring. You’re probably going to procrastinate on it. And we’re going to tell you right now, stop it! As painful as setting up processes and automation is now, you’re going to love yourself later for doing it.
Get your systems in place now, set up your bank accounts properly, figure out hiring processes, payroll, and bill payments. Then when your business has scaled and is moving full speed ahead, you won’t be slowed down by a lack of planning.
And one of the best ways of making sure your automation and workflow works? You’ve got to enforce it, say the people behind KissFlow, a workflow software platform. Even if you’re still the only person at the company or you only have one or two employees, following your processes and automating as much as possible now will help you work out the kinks before they become huge problems down the road.
Hang On To Your Current Customers
If you’re in the early stages of your business, the customers you have now are real keepers. They took a chance on you. They trusted you even though you’re new at this. Don’t fire loyal customers when a bigger, fancier one comes along. Make them a priority and they’ll stick with you.
Still not convinced? Did you know that acquiring a new customer is six times more expensive than hanging onto an existing one?
We’re not saying you should hold on to bad customers. Bad customers devalue your time, try to get as much as possible for free and suck your energy dry. They need to go no matter what.
Outsource When You Need To
You can’t do everything. In the early days when it’s just you, be willing to pay someone to do tasks you aren’t good at. For instance, if you need marketing content but hate writing, outsource to a good writer. If you hate bookkeeping, hire an outside bookkeeper.
Outsourcing, according to a New York Times article, helps you keep costs low, reduce inefficiency, and be more agile. And as a new or small business, that’s what you need.
Community Question: How do you measure up? Are you putting in place practices that encourage sound growth? Share your story in the Business Owner Only Community!
image credit: Bigstock/alphaspirit
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Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.