The thought of scaling your startup is an exciting prospect – but it’s a nerve-wracking one, too. On top of this, you may be questioning whether this is the right time to put scaling plans in place or if you should wait until a little further down the line instead.
If you feel this way, you’re not alone. Even the most seasoned entrepreneurs often feel jittery around scaling and nervous about whether they’re making the right decision. Taking a few key factors into account, however, can help calm those fears and put your mind at rest that you’re making the right decision.
If you think your startup is ready for the next exciting stage of its adventure, then below, you’ll find some of the most important things to take into account to help everything go swimmingly and avoid some of the most common pitfalls.
Don’t Skimp on Planning
Proper planning is one of the most important elements to ensure that your scaling is successful. Poor planning is often a key reason why plans for expansion fail – often avoidably. So spend as much time as possible on this first stage.
Start by defining your reasons for scaling up and what you want to achieve. Are you planning on grabbing a larger portion of the market share, or is it about diversifying your product line? Are you planning on moving into a new territory? There will likely be many reasons for the scaling, but listing them in priority order can help you to get really clear on and achieve your goals.
Funding is obviously crucial, and a concrete plan regarding where this will be coming from needs to be in place before anything else can be done. A contingency plan and backup emergency fund are important – just in case.
What Your New Team Structure Looks Like
In the vast majority of cases, when a business scales, it will need to take on more employees, possibly even create entire new departments, and it’s vital to plan for what this new structure will look like to ensure you’ll create a team that can offer the business the best levels of value and productivity possible.
As part of this stage, you’ll also need to consider things like office space, software systems, and digital platforms designed to support team collaboration as your workforce grows. This could be especially important if your team will be a remote or hybrid model.
If you were previously managing things like the accounting process and payroll in your startup, this could be the time to look to either delegate these tasks to new members of staff or to bring on board automated tools that can lift the burden of repetitive, manual tasks, and help ensure compliance at the same time.
Ensuring Product Market Fitness
Part of your scaling plans could involve a new product that you’re keen to bring to market. Before going any further, however, take some steps to ensure that this product is market fit: this means that it’s the right product and that your plans involve marketing it to the correct market segment.
Validating the demand for this new product is the most important means to ensure this. To achieve this validation, consider running in-depth, multiple focus groups to find out what audiences really think about the product and think carefully about the existence of a predictable sales pipeline.
Assess Operational Challenges
Scaling your startup will bring some major challenges, and one of these is likely to be around operational issues. It’s not just your staffing that’ll probably need restructuring – your supply chain, vendors, and other internal processes are also going to be put under new and possibly significant strain.
Think ahead before putting your plans into action: what pitfalls could arise on this score? Will you need to secure a new fulfillment provision or seek a change to the terms of your contract with your current provider? Putting in place consistent systems for team members to follow is also crucial: ensure that there’s a process in place for every important element of the work and that every single person knows what these processes are.
Proceed with Caution
And finally, it’s important to be mindful of the warning signs that your scaling plans are going too fast or things need tweaking.
Keeping an extremely close eye on cash flow and expenses is always important, but even more so during the scaling process, to ensure everything is on track. Also, watch out for things that could negatively impact your plans, such as new regulations coming into place that could affect your product’s cost or marketability, over-reliance on a single customer, or rising utility costs.
Making Scaling a Success
If done properly, following in-depth planning and market research, there is no reason that your startup shouldn’t scale well. Being mindful of any factors that could affect your market, or your ability to expand into the territories or audience segments that you’d like, can help you avoid any setbacks and ensure that your product or service is market fit and ready to take on the world!