Scale Up Your Startup
While all startup founders cross their fingers for overnight success, the truth is that most startups need to put in some serious work to ensure growth. Scaling up is complicated, intensive, and oftentimes pretty frustrating, but it’s also the foundation of business growth.
Growing or Scaling?
First, it’s important to understand the differences between growth and scale. When your business grows, the revenue and profits of your startup expand at a similar rate. Think about when you expand your client base — you’ll also need to spend the money to hire more staff to meet that demand.
On the other hand, scaling doesn’t need a financial investment for growth: Revenue rises, but not operating costs. This means that small, bootstrapped businesses don’t necessarily have to spend big money to see big results.
When Is It Time to Scale?
The next question many business owners and founders ask themselves is whether it’s the right time to scale up? Choosing to scale too soon could put a huge strain on business processes, and research shows that premature scaling can lead to slow long-term growth — to the tune of 20 times slower than those startups who scale at the right time.
Here are the signs to look for that the timing is right for scaling up:
Staff: Your team is integral for your scaleup success. Are they ready to innovate? Will they be prepared for exponential growth? Could they take on additional roles to help allocate the increased workload? If the answer to these questions is “yes” that’s a good sign.
Milestones: When you created your business plan, you likely identified KPIs and goals that would indicate success. If you’re blowing these milestones out of the water and you’re ready for a new challenge, consider that the time is right for scaling.
Cash flow: What’s your profit margin looking like these days? If you needed to invest money in your scale-up process, would your cash flow suffer? What would you do if the scale-up didn’t work and you take a financial loss? These are also important questions to think about.
Solid IT infrastructure: Startups are increasingly turning to tech tools and software to support scaleups. Does your current workplace have the literal bandwidth to support your IT strategy as you scale? You need to ensure that work continues without disruption.
How Does Scaling Work?
Start with a strategy — it doesn’t need to be complicated and complex, but it does need to be clear and concise. Set quarterly and annual goals, an analysis of the market, and any information about investors if applicable. If this is your first scale-up, don’t be shy about asking mentors, advisors, or business coaches for guidance.
Invest in tech that helps reduce the labor required to scale. Tools like customer relationship management software, enterprise resource planning systems, and collaboration tools will streamline admin processes that can take your team away from focusing on high-value stocks that directly impact business scaling.
Outsource the tasks that can be completed by an outside partner, like marketing, website development, accounting, and graphic design. While large companies usually fill these rolls in-house, smaller startups don’t have the luxury (or the revenue) to do that. It’s a wise investment to lean on other experts.
How will anyone know about your startup scaling if you don’t make noise about it? Amp up your marketing to send a message about your big moves with content marketing, social media strategies, and even influencers that act as ambassadors for your brand.
Once these pieces of the puzzle are in place, hire strategically. The ultimate goal is for startup founders or business owners to trust that they could walk away for a beat and things will still run smoothly. Look for leaders that will support your scaling initiatives and effectively manage without you having to step in.
When you know it’s time to scale up your startup, find an office space that fits the new vision of your business. The Globe Building has a Meet Me Room that offers tenants, carriers, and data centers the ability to interconnect in a shared, carrier-neutral environment without incurring local loop fees.
Ready to start scaling up? Request a tour of our office space. For businesses that desire custom space, low-cost gigabit internet speeds, secure parking, and unique architectural features, choose an affordable space option in the high demand Downtown STL Innovation District.
