First, let’s start with the question, “What does it mean to you to scale your company?”
Scaling could take on different meanings depending on whom you ask and their goals, among other factors. You may hear responses like, “I think scaling is growing the company’s revenue faster.”
As you can imagine, this could mean taking a yearly revenue from $1.4 million to $1.8 million.
To some, that is not truly “scaling your company.”
This critical question clarifies what “scaling the company” truly means. Scaling your company is about growing revenue by at least 2X YOY. For example, your company could generate $1.4 million in annual revenue. Scaling is now going to $2.8 million the following year. This shows why defining what scaling means to you is critical!
Scaling your company takes on a life of its own.
Let’s look at how to scale your company. Think of your business as having two sides. One is predictability; the other is scalability. Let’s start with one who thinks scalability is the right way to go. In most cases, owners have put their life’s savings into starting the company of their dreams. It puts instant pressure on scaling the company. Many owners put so much time, energy, and money into scaling the company from day one. As you can imagine, the challenge is the company not generating revenue and running out of funds within the first two to three years. Without sufficient revenue coming in, the company is now at risk for survival. It may be wise to put about 10% of your mind into scaling the company and the remainder into predictability. Predictability offers the opportunity to scale the company in the future.
Predictability is generating revenue by working in the business short term by making sales and building a support system as the company matures.
One challenge of scaling a company is thinking your product or service will scale by itself. In many cases, the best product or service doesn’t always win. If you research the numerous products or services introduced to the market, many of them have never hit the ground running. Their platform wasn’t practical for scaling or marketing the product or service.
You could have a great product or service idea that flops because it doesn’t have the scalability and marketing support behind it. The product alone won’t take your company to scalability.
A second challenge to scalability is personality.
Personality alone won’t scale your company, either. You can have an extraordinary personality and have the respect of many in the industry and community you serve and never scale your company. The challenge with personality driving scalability is that everything depends on you. What happens when you are no longer involved in the company? What happens when the company gets to a size where you can’t be involved in all the business decisions and customer inquiries to the point that you feel like you are losing control and stress takes over? It is the monster of having a personality that drives your company. The more your company grows, the more it sucks all your energy. I would say that’s not conducive to a good quality of life!
It is why having a great system is one key component to scaling your company. This system should produce results with your great product or service.
However, a great system alone won’t scale your company without a driver. Someone on the leadership team must understand how to drive the system you have in place.
I’m a sports fan and relate a lot of growing companies to sports teams. Greg Popovich, the coach of the San Antonio Spurs NBA team, is a driver and big thinker.
His product is his players and all his support staff. The Spurs haven’t always had the #1 draft picks coming out of college. Indeed, they had good players who just happened to be great game students. What made the Spurs a dynasty in the 80s- early 90s was the system Popovich built and drove day in and day out. Let’s look at the Chicago Bulls. You know the story there. Yes, Phil Jackson is a driver who had arguably coached the best player of all time, but the triangle offense drove the Bulls to be recognized as one of the most successful and recognizable sports dynasties of all time.
Bill Belichick of the New England Patriots NFL football team is another great example of a driver who works within a system. Unless you are a Patriot fan or live in the part of the country, you would be hard-pressed to name 10 of the starting 22-man roster.
Now, ask yourself the following question.
Does Popovich, Jackson, or Belichick have the best personalities within the ranks of professional coaches? I would say not. So, this proves that neither personality nor product alone will scale your company. On the contrary, this proves the system these teams operated with and having the correct driver far outweighs having the best product or service and personality.
Another challenge with scaling a company is celebrating too long. Guard against one huge sale or gain a new vendor that makes your financial goals that year. Drivers expect these things to happen. Therefore, they don’t stay in the “celebration world” too long. They are constantly thinking about how to win another championship the following season.
Drivers never settle. They think multiple titles and legacy, i.e., SCALING THE COMPANY!
Earlier, I referenced “working in the business” in the early stages of a company. Once you get your system in place and have a driver mentality or a driver in the leadership ranks for company support, it’s time to “work on the business.” Often having both simultaneously, this is a timing issue, but scaling is at your fingertips when you do. “Working on the business” is now where you should live!
Finally, let’s discuss leverage and its impact on scaling your company. This is the final piece. #1, don’t try to be a CEO if you’re a good CFO or fantastic COO. You don’t have all the answers! Build a team around you to complement your skill set. Ask yourself how to leverage the right partnerships, vendors, executive team around you, and time. Without understanding how to use leverage, scaling your company becomes more difficult.
Are you spending more time on scalability or predictability?
Are you more product, personality, or system minded?
How do you now scale your company based on where your company is?
What are you going to change knowing what you know now?