Advanced Techniques to Speed Up The Scaling Phase For Startups

Latest posts by Samantha Clark (see all)

Once a startup has successfully launched, it can move onto the scaling phase. This can be a perilous time for a fledgling company, with only 1 in 200 startups becoming successful scaleups.

There are many reasons for this fairly low success rate. For example, a startup’s product could be inadequate, failing to address its target market’s actual needs. Or the organizational structure and processes could be incapable of handling the exponential increase in sales volume. Or the company could simply choose the wrong time to launch its product. Despite the many pitfalls and seemingly low odds of a startup becoming a successful scaleup, there are ways to ensure the highest chance of success for any market newcomer. 

In what follows, we will outline five advanced techniques that will ensure the groundwork for scaling up has been completed and provide a startup entrepreneur with the means to move a startup company to the big league.

1. Build your business with scalability in mind.

Although you might have a quality product that targets your customers’ needs, it is not necessarily a product that can sustain a scaled-up business. Certain products, such as software, media, online services and electronics, are inherently scalable. Other products, however, can put excessive strain on your resources. Consulting and blogging are some of the best businesses to start with little money, since they require very little initial investment and can be scaled up easily.

A product that scales well is a product that appeals to buyers more than the current similar products on the market. However, if a startup’s processes aren’t designed to scale up, the company might soon find itself stuck in a bottleneck.

Along with sales volume, complexity also grows, leading to a faster growth of expenses instead of revenues. In addition, ineffective business processes can introduce problems that will scale along with your startup. This may quickly lead to a stranglehold on new opportunities and undermine your efforts to expand your market share.

As Janice Yau of HelloSign points out, a startup entering the scaling phase should have already done the following:

  • Establish a sales process that allows for high volume.
  • Establish production and delivery processes that can be scaled easily.
  • Establish efficient communication channels.
  • Design business operations that can grow exponentially.

Ensuring your startup is ready for scaling requires an investment of time and money.

2. Automate processes and outsource repetitive tasks.

Tying into our previous point, in order to make your business scalable, processes need to be automated as much as possible.

Administrative tasks can take up much of your time — time that would be better spent developing your product, designing a marketing strategy or performing other tasks that encourage growth. If you have people doing things that a computer can do, you’re wasting precious time and resources.

Software solutions are a sure way to streamline your processes. You can, for example, implement a customer relationship management system (CRM), automate payroll with a paystub generator, and automate your marketing campaigns with dedicated software. You can also set up cloud storage and computing and create training videos and training processes for new employees.

The ancillary tasks you can’t automate? Outsource them. 

If your company offers legal advice, there’s no need to employ a full-time copywriter. Likewise, if your flower shop is looking to expand into a new market, you don’t need a full-time legal consultant. Instead, delegate these roles to external contractors and keep only the essentials in-house. 

Once the scaling up of your startup is well underway, you can consider hiring full-time employees to handle the ancillary stuff.

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 3. Find and retain the right people.

Your growing business will require more employees to handle the additional tasks efficiently.

Hire only people who are necessary to maintaining your business operations. They need to be able to do what an automated computer program can’t. Generally, you want people who will bring good ideas and have more than one skill. When a company is at its startup stage, it is common for employees to perform multiple tasks. 

This becomes even more important in the scaling-up stage. Since your company is about to go through rapid changes due to (hopefully) an exponential increase in sales, employees with multiple skill sets can remain flexible and help you get through this turbulent phase.

Be very careful about who joins your team. If the people on your payroll aren’t adding value to the company, they are little more than a drain on your resources.

In addition to having the right people on board, you also need to cultivate a positive environment. It is easy to maintain engagement and motivation with a team of 10. However, once your company starts growing, it becomes essential to implement employee engagement strategies and reward programs to motivate your team members. 

4. Measure customer success. 

Growing revenue is a crucial indicator of your startup’s success. However, according to economist Mark Roberge, establishing your position in the marketplace starts not with your own success, but with your customers’ success. In other words, revenue retention is the best go-to indicator to measure the growth of your startup.

Furthermore, your decisions on when to scale up and hire, for example, more sales representatives, should be based on this data. If the indicators consistently show that you are achieving your set goals, this means it is time to expand. Conversely, if they start slacking, it is time to slow down and fix the problems.

A data-driven approach to scaling will provide solid guidelines on when and how fast you should expand your business. Although this could mean a slower revenue in the next quarter, it will provide a higher chance of success in the long run.

5. Try to catch a wave.

We’re not referring to surfing, but market waves. 

One of the crucial aspects of a successful scaleup is timing. Proper timing can mean that the industry itself is growing, thereby allowing new companies to fill these newfound gaps in the market. Additionally, plenty of open space in the market won’t cost companies in terms of sales volume and therefore shouldn’t cause them to react competitively.

Furthermore, industries can occasionally experience a significant shock or trend that suddenly opens up new space in the market. This can be related to the changing behavior of customers, technological breakthroughs, changes in market regulations or shifts in the economy. 

When launching a new product, a sure way of getting the lion’s share of the market is by being ready just before or exactly as the wave takes off. So, look for clues that might indicate new market opportunities and the time of your entry accordingly.

Although it is impossible to predict the future, you can determine the perfect timing to launch your products by keeping track of developing trends in your sector.

In conclusion

Along with the techniques covered here, there is an underlining requirement for the successful scaling up of a startup company – be patient. Although this piece of advice may seem somewhat at odds with the article’s title, it is probably the most vital point to keep in mind.

Around 70% of startups fail during years two through five, which usually correspond to the scaling phase of a business. If a startup scales too quickly, it could lead to a broad range of organizational problems that may raise operational costs above revenues, and lead to the company’s failure.

So, to successfully scale up your startup, make sure you have the basics down. You’ve achieved product-market-fit, assembled a good team, streamlined your processes, and outsourced nonessential tasks. Once you have these essentials covered, you can start carefully scaling up your business.

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