7 Alarming Mistakes You're Making When Scaling Up (And How to Fix Them)


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Tuesday, December 21, 2021

Knowing the most common errors businesses make when scaling up puts you in a better position to avoid these pitfalls and achieve lasting growth.

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7 Alarming Mistakes You're Making When Scaling Up (And How to Fix Them)
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Scaling your business is exciting, but it can also be extremely challenging. There will be many questions to answer and obstacles to overcome as the company grows, some of which will be entirely new to you and will therefore require novel solutions.

To maximize your chances of success, educate yourself on the most common mistakes companies make when scaling up and devise a plan to avoid falling into the same traps.

1. Not looking after your staff

Scaling a business involves a lot of work and requires maximum commitment from everyone employed by the company. However, you should be cautious of getting so caught up in the minutiae of the process that you overlook fundamental practices that are essential to the basic health of the business, such as looking after your employees.

To avoid this, make sure every manager and team leader within the firm is maintaining a regular pattern of communication with their staff. This helps to ensure that any issues or concerns in the workforce are noted and the necessary measures can be put in place to keep people happy and productive.

2. No clear strategy

Scaling your business is a serious undertaking, so it needs to be backed up and driven by a strong, carefully thought out strategy. Without this, you run the risk of pouring a lot of time, energy and money into activities that lead nowhere, because you don't know what you're ultimately trying to achieve or why.

Before embarking on your scale-up project, get together with your fellow managers and other business stakeholders to come up with clear answers to questions such as:

  • Why are we scaling up?
  • What incremental goals will we have to achieve on the way to achieving our final objective?
  • What role does each department have to play in fulfilling these aims?

3. Neglecting loyal customers

It's a well-known fact that acquiring new customers costs more than retaining existing ones, so it makes financial sense to invest in keeping your current audience happy.

Amid all the change and excitement of the scaling-up process, make sure you don't overlook consumers or companies that have bought from you in the past. Consider actions you can take to optimize customer retention, such as:

  • Introducing loyalty programs and rewards
  • Studying customer reviews to find out what people want and how you can keep them happy
  • Connecting with past buyers on social media to update them on exclusive offers and discounts

4. Losing sight of your core values

Scaling up requires the business to strike a balance between accepting that certain things will change as you grow, and staying true to the core values and practices that have enabled you to get this far.

One of the most important considerations is your company culture. If this has been a key factor in your success so far, make sure it isn't sacrificed or forgotten about as the business grows. You can achieve this by making sure every decision you make reflects your fundamental values in some way and rewarding employees whose conduct is representative of your culture.

5. Poor hiring

The need for additional capacity within the business as it grows could lead you into the trap of hiring too quickly and not adhering to your usual standards and processes. This raises the risk of bad hires, which is exactly what you don't want when scaling up.

Make sure you continue to invest in crucial recruitment and HR practices that will help you make the right hires and deliver a positive experience to job candidates, such as effective interviewing, reference checking and onboarding.

6. Insufficient cash

Healthy cash flow is an absolute must if you want your scale-up project to be a success. A bigger business means higher costs that must be met if you want to achieve sustainable growth. For example, you can't make plans for the next year if you're unable to make payroll next month.

As part of your scaling preparations, think about practical actions that could improve and maintain your cash flow, such as:

  • Offering discounts and incentives for existing customers to place bulk orders or pay in advance
  • Leasing vital supplies and equipment, rather than buying them outright
  • Addressing flaws and inefficiencies in your invoicing procedures
  • Optimizing your inventory to minimize cash tied up in goods and merchandise you don't need or aren't selling

7. Failing to delegate

One of the many hallmarks of good management is knowing when you need to take a back seat and let others take charge. Effective delegation is particularly important when you're going through the hectic process of scaling up, simply because you can't do everything yourself.

If you believe in the hires you've made and you have faith in your colleagues and employees, show it by relinquishing some control and trusting others to take the lead on crucial tasks and projects.

This will lead to a more even spread of responsibilities across the business and a more engaged, committed workforce, which is crucial if you want to scale successfully.

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