How to Grow Your Business in a Sustainable Manner
Every startup and young business has the goal of eventually increasing profits and growing. But scaling for the sake of getting bigger is dangerous and inefficient. It opens you up to new vulnerabilities and risks that aren’t necessary at your current stage of business. Smart, sustainable growth must be the focus.
The Problems With Premature Scaling
“Scaling is a good thing, as long as it’s done right,” according to Entrepreneur. “Scaling is the result of a startup’s growth. Too often, however, scaling is intended to drive a startup’s growth. That’s where we have a problem. That is premature scaling.”
Premature scaling usually happens when one dimension of the business grows out of sync with the rest of the business operation. Patel points to research that shows premature scaling occurs in 70 percent of companies and is responsible for the failure of nearly three out every four tech startups.
Premature scaling can grow out of any number of issues, but is typically tied to one of the following issues:
- Too much money for the phase of the startup growth cycle a business is currently in – causing the business to feel pressure to expand operations beyond a manageable level.
- Excessive bulk and fat in the organization – such as over hiring employees or leasing/buying real estate that’s excessive for the current growth phase.
- Too many customers/early adopters at an early age – which causes the startup team to shift focus away from innovation and towards customer service.
In the moment, scaling seems good, exciting, and healthy. But what many entrepreneurs discover on the back end is that scaling for the sake of scaling is usually premature and inefficient.
Three Tips for Sustainable Growth
The antithesis of premature scaling is sustainable growth. If you want to grow your business in a smart and efficient manner, here are a few tips and pointers to implement:
Establish Autonomous Operations
One of the biggest dangers young startups face is developing too much reliance on a single individual – typically the founder.
While you may be capable of handling a major responsibility at an early stage, it’s nearly impossible for you to scale up as the business grows. You have a finite amount of time and energy and the business will ultimately fail when you’re no longer able to match demand. It’s for this reason that you need to focus on establishing autonomous operations.
Use an Outside Growth Firm
You can’t scale out of emotion. Feeling that it’s the right time to expand, grow, or enter into uncharted territory is usually a mistake. Unfortunately, it’s nearly impossible for you to separate your feelings from your business, which is why it’s a good idea to bring in an outside growth firm to provide objective, calculated guidance.
According to NYC growth strategy firm Nonpareil, data-driven decision making is the best way forward. By removing emotions and personal feelings from the situation, you’re much more likely to make decisions that are right for the future of the company (even when they don’t feel good in the moment).
Continue to Focus on Customers
If you’re finding it difficult to stop thinking about scaling, you need to shift your attention to an aspect of the business that’s unscalable. This includes learning about customers, spending time with customers, and listening to their complaints and critiques.
“Focus is good, provided you’re focused on the right thing. Focusing on scaling is not the right thing,” Patel acknowledges. “Focusing on your customers is, by contrast, is healthy and essential.”
You’ll feel like you’re wasting your time when you spend two hours answering customer emails on a Monday morning, but the reality is that you’re focusing on the present, learning about your business in a stage-specific manner, and shifting your energy away from scaling. Those are all good, sustainable actions!
Don’t Rush Into Anything – And Follow These Tips For Sustainable Growth
With startup growth, easy does it. You may feel the pressure to scale quickly, but most of that pressure is coming out of a selfish or immature place. Healthy businesses establish a stable foundation and then expand.