PrincePerelson & Associates

How to Overcome Scalability Bottlenecks and Grow Your Business

After much planning, funding, beta testing, debugging, advertising, recruiting, and working long hours, your beloved startup is finally making a profit. You have proven that your company provides a product that works and is a valuable resource to your customers. The only thing standing between you and the success you’ve dreamed about is scaling up and bringing your business to more customers.

For startup owners, the decision to scale up leads them into uncharted territory. The path will be unique for every business. However, many hurdles are the same regardless of your product, service, or industry. Many business owners have taken this path before you and learned from their mistakes. Knowing what you don’t know before it stalls your growth can help you avoid these pitfalls and keep you on the path to becoming a bigger and more successful business.

Common Bottlenecks to Growth

Setting the Wrong Goals

For a burgeoning business, a five-year plan may seem sufficient to plot your course to success. Short-term goals provide a pathway to guide your direction. However, they do not define your destination. Setting goals with your ultimate achievement in mind will keep your focus on the prize and allow you to plan the steps necessary to get there. Avoiding detours that do not support your long-term plans will keep you on the straightest path to success and save you time and money spent on distractions along the way.

Scaling Too Soon

There are bound to be early adopters whenever a company launches a new product or service. Some portion of the population will love what you have to offer and jump in with both feet. Their enthusiasm may lead you to believe you have found your target audience and must grow to keep up with demand. While this may be true for a lucky few companies, for most, the road to success is much rockier.

Jumping the gun to scale your business without the proper infrastructure can have disastrous consequences. Your processes and procedures may work well for a company of 25 people. Unfortunately, scaling processes inevitably reveal and magnify existing bottlenecks. Your company may be able to grow, but it may become less efficient in the process.

Optimizing your communication, systems, processes, and procedures before you begin growing will yield rich benefits, including helping you maintain the same high-level service your customers expect.

Doing Too Much

What is it that your customers love? When you are scaling, your business is not the ideal time to start adding features, products, or services. Growing to meet your goals will require you to focus on what you do better than the competition. Avoid disorganization by deciding what you are and aren’t going to invest time and money into accomplishing. Don’t be afraid to turn down customers’ requests if they are outside the scope of your services. Customizing your service or product to meet the needs of every customer will take time away from scaling your business and undermine your goals.

Failing to Change the Management

Managing a company of 50 is drastically different from managing a company of 100. The management structure that has served you well up to this point will not continue to work as you scale up your business. What used to be a flat management structure that allowed you to keep tabs on daily operations will need to shift to a management pyramid. You will need to delegate tasks and rely on your managers to oversee employees. This arrangement frees you up to dedicate more time to defining the goals and direction of the company, securing funding, and interacting with other industry leaders.

Many business owners may find it challenging to trust others enough to delegate important tasks to them. Determining who you trust to handle tasks and letting go of the reins is critical to your growth.

Neglecting Marketing

Funding can be tight as you fight to grow your business. You may see spending more on marketing as a last resort if your reviews and word-of-mouth advertising aren’t enough. The sustained, organic growth you hope will happen to you is rare in business. Scaling a business most often requires marketing.

Using your limited resources correctly, though, will yield the best return on your investment.

  • Start by determining who your target audience is and where you can reach them.
  • Avoid putting all your eggs in one basket by investing in more than one advertising method.
  • Determine what KPIs are indicators of success and track them.
  • Adjust your marketing campaigns based on the data you collect.

Hiring the Wrong People

When the work starts rolling in faster than you have seen before, going on a hiring spree can be tempting. Spreading the workload across more people is bound to help, right? Not always. The quickly increasing workload is a sure sign that you need to hire more employees. However, hiring inexperienced people who lack motivation or are a poor cultural fit for your company can drain your limited resources.

High-volume hiring done right can yield impressive results. However, it can be extremely challenging for less experienced business owners. If you need to hire many employees in a short period of time, consider partnering with a recruitment firm. Their professionals can tap into their extensive network of contacts to find you employees with the skills and knowledge necessary to hit the ground running and remove some of the burdens from your team. It may take time for your staffing to catch up with the workload. Temporarily relying on current employees to work hard is an option, but be sure to recognize their efforts and compensate them accordingly.

Scaling your business is a challenging proposition. Many savvy business people have tried, only to run into problems they never saw coming. However, understanding the common issues that arise and planning for those contingencies now will put you in an excellent position to achieve your goals. Successfully scaling your business at the right time and in the right way is possible.