We’ve all been through it – the early days of any business are often filled with excitement and uncertainty. It’s a part of the process everyone has to go through as they navigate startup to scaling-up and becoming a successful sustainable business.
Who doesn’t aspire for hypergrowth and massive scale? More sales, more customers, more markets, more staff and long-term sustainability for your business. Sounds appealing, right?
In reality, scaling your business means creating a foundation to serve more customers with the same resources in the future. It’s laying down the systems and the infrastructure for your business to respond to organisational change driven by growth.
It’s not something you do just once; it’s a continuous process – something you’ll repeatedly do throughout the life of your business. Business growth means new customers, new challenges, and new opportunities. Sometimes it will mean new products, new investors, new markets, new marketing approaches, new vendors, new employees, and most importantly lots of new challenges.
Many early-stage businesses often fail because of factors such as – lack of product-market fit, cash flow, poor leadership, and not having the right strategy to scale. Fundsquire reported that 20% of businesses fail in their first year, and around 60% will go bust within the first three years.
Unfortunately, there is no clear by-the-book indicator to tell you that you’re ready to scale. No metric unequivocally tells you if you’re ready.
So how do you know when it’s time to scale up?…by looking out for these 5 signals:
1. You SMASH your business goals!
When you started your business, you had business goals, and you have already attained them and probably surpassed them on your way to hypergrowth. You are now far ahead of your competitors, validating product-market fit. Everything seems straightforward these days – however, growing pains are on the horizon if not already upon you. It’s time to think about scale, don’t run the risk of sliding into a comfort zone – doing what you have always done! You need to start planning for scale, potentially set new business goals and take your business to the next level.
Challenge your business to be the most it can be – scaling could be the answer!
2. You have a path to positive cash flow or new investors.
It’s one thing to generate a profit. It’s quite another to create positive cash flow for your business. Having a positive cash flow means you have the means to cover the costs of expansion and buffer yourself from unexpected setbacks as you grow. You know you’re ready to scale when you have a notable increase in cash flow and rapidly growing revenue projections.
Another alternative to look at is when you have a pipeline of investors who are ready and hungry to invest in your business. It means they can see the potential. The indicators show them that your business is ready for scale, and with the right investment, they are prepared to make a bet on you.
3. The business is living and breathing the company vision.
The business has a strong purpose-driven culture as everyone is living and breathing the company vision, purpose, and mission. There is strong strategic alignment across all functions and levels of the business with a high level of collaboration to deliver strategic objectives that meet business goals. Everyone is clear on the company’s strategic direction – employees understand what and how they contribute to the success of the business on a daily basis.
If the business is not on board with what your vision stands for, it will be risky to move ahead on your scaling journey.
Alternatively, if you believe that there is an opportunity to revisit the company vision, purpose and mission, it is recommended to do so before entering the scale-up phase. Realigning the strategic direction of the business and providing clarity on where you are headed is critical to any scaling journey.
Your vision is the cornerstone of communicating the purpose of the business to inspire, engage and motivate your people to do the right things at the right time!
4. Your revenue generation engine is in overdrive.
You are smashing revenue growth targets consistently quarter on quarter, year on year. You’re doing well, period. Like a freight train, your business is experiencing huge sales momentum with forecasts and projections going from strength to strength.
If the ratio between best results and worst results is narrow across the sales team, your business has a rapidly growing loyal consumer base providing evidence of excellent product-market fit. These signs indicate prosperity and suggest it’s time to scale the businesses go-to-market capabilities to serve more customers in more markets.
5. Your customers love you.
Your customers love you and keep coming back for more! A returning client base is a sign that your business delivers a fantastic customer experience AND that you’re delivering it consistently. Repeat clients also give you a sense of financial stability and confidence that your business will see future demand.
You may also find yourself in a situation where you are turning away customers because you can’t service them appropriately – NOT COOL! This is also a clear indicator of a strong product-market fit with high demand for your business. Rather than becoming your own productivity “bottleneck,” – it’s time to scale and fast!
Before you start scaling, you need to make sure you have a strategic plan that outlines the WHY, HOW, WHAT behind your organisation’s scaling journey. You also need to ensure your infrastructure, systems, and team can handle the potential influx of customers. You could be operating efficiently with the current resources because you can control the numbers. However, when the numbers start increasing, it is a different story altogether.
You don’t want a situation where it gets chaotic with things falling through the cracks, delayed processes, burnt-out or worse – unhappy employees.
And that is why we at Ellivate focus on helping organisations, and their go-to-market teams scale systematically.
Our powerhouse team of industry experts – with a combined 60 years of experience – will work alongside your business to design and achieve your scale-up goals.
We have a shared passion for working with businesses to achieve rapid growth and apply an authentic, human layer of expertise that addresses the real challenges and concerns at the heart of your business.
We will work alongside you as a trusted and expert partner. We get in the trenches and ensure every solution is embedded within your business.
Ellivate Consulting’s team of industry experts help you go next level
Remember to remain realistic in your scaling goals; biting off more than you can chew could run your business into the ground.
The bottom line is – scale up only when you are ready. Don’t create unnecessary risk in your business and its progress just because profits are up one quarter or you have a trustworthy team.
You know what they say:
“Nail it before you scale it.”
Pay close attention to these 5 signals, and you’ll know exactly when it’s time to invest and scale your business. Who knows, you might even be at that point right now.