What are the problems with scaling your business?

Scalability - Successfully expand your business

What is scalability?

As the workload increases, a system is considered scalable if it continues to function. Robert Sutton and Huggy Rao, authors of the book Scaling Up Excellence: Getting to More Without Settling for Less, claim that many founders keep confusing the terms scaling and growing with one another. growth includes higher sales and a higher number of employees, with one Upscaling describes a lot more. This includes, for example, that the organizational structure and the business model expand and improve in harmony. Take a human metaphor as an example: An arm that grows on its own lacks functionality. A body in which not only one arm but also all other parts grow is characterized by a strong heart, which continuously supplies the growth with life energy.

In other words, a founder aspiring to a growing business should be a Overall perspective and ensure that the company has the support it needs in crisis situations. On this subject, the Harvard Business Review noted that a company with a scaling perspective has up to 65% higher chances of success than a company that is limited to growth. Each company will encounter different challenges in the growth process - but there are special ones here four aspects in successful corporate developments that you should consider as a founder.

1. Optimize technologies

Technological developments enable a multitude of possibilities not only to cope with old problems with new approaches, but also to reverse them and thereby optimize them. Digitization has made revolutionary business models with scalable corporate structures possible for founders. Uber, Airbnbn and Facebook are just a small selection of models that have grown exponentially. The decisive factor in this rapid growth was the network effect, which makes a system more effective through a growing number of members. Due to the widespread networking, contacts come into contact and further opportunities are created.

Digitization and new technologies enable a multitude of possibilities for founders who want to integrate scalable elements into traditional business models. As soon as you decide on scalable aspects in your company, technology should become your constant companion. Which work tasks are part of the daily activities of your colleagues? Now imagine that your company has grown ten times. Would you still have the capacity to successfully master all tasks? If not, a technological measure could help you to standardize certain processes with the help of an IT solution.

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2. Find your place in the network

For many founders, it can be difficult to hand over work tasks to colleagues and outsiders, especially when the company is developing and new fields of work are developing. A business idea that should be effective and successful is based on a well thought-out cooperation. Researchers argue that a company can be described as an integrated network, with each actor contributing with new nodes and functions. To get an understanding of your own network, take a step back and explore which part of your company is unique and which areas should be strengthened. This makes it clear which processes are superfluous and should therefore be relocated to the outside - in this way you optimize your work processes and focus on your strengths.

3. Integrate vision and culture

As soon as a company's numbers skyrocket, it moves Corporate culture quickly in the background. This is precisely why it is very important that new employees get an understanding of the common vision and thus pursue the same goal. One example is Starbucks - a café chain that is globally successful with a unique atmosphere. However, when one day you found one Starbucks café after the other on every corner, the cozy atmosphere disappeared and the focus was now more on better results than on a better experience. The staff no longer strived to give guests a unique experience.

Thereupon the founder Howard Schulz reacted and focused again on a cozy interior and on marketing his chain as the third most important place of a person. The example shows that higher sales cannot be regarded as the only quality feature. To ensure that a high standard of quality is maintained, which expresses the company's value, all employees should pursue the same goal. The Company mission and vision should be reflected in all tasks. A strong culture should be created that spreads a positive attitude in the minds of employees, even if work tasks change quickly as the company grows. It is precisely the competence of flexibility in growth that makes a company successfully scalable, as new challenges can be met decisively.

4. Cash flow

Whether you manufacture or sell products, company growth is always associated with costs. Even a company with sustained profit will face higher costs as the workforce and marketing activities increase. In fact, many businesses go downhill once their finances are insufficient to pay all the bills. So integrate a Cash flow analysis in your company to keep track of your income and all bills to be paid.

If you have the feeling that you have lost track of your company's situation or that you could optimize your processes, then call in an expert today. At Ageras we are happy to help you find a suitable consultant for your company.

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