If you’ve sat in a handful of investor meetings on your journey to now, then you’ll know that investors love startups that are “scalable”. Of all the words in the English language, investors seem to love “scalable” the most. That said, having a startup that’s ready to scale should be a priority of yours whether you are looking for an investment or not. Why? Simple. Being able to scale means your business has the potential to grow and expand at a moment’s notice, multiplying its revenue without having to take on any incremental costs.
Of course, the real question is “how?” which is why we have pulled together some logical tips on how you can make your startup more scalable from the outset. Think of it as, well, future proofing.
It Starts With Your Idea
A cool, useful, handy or glorious idea does not necessarily mean it is a scalable one; even if your buddies down the pub think it is. That is why you need to do all the market research you can, figure out how your idea could scale up in business terms and then use third-party experts to strengthen your argument. That could be a consultancy company or an outside research business with a valued opinion. Trust us, if you have respected companies explaining how your idea offers up a million dollar opportunity with the chance for year on year growth, then you are going to see you get the funding needed to make that scalability a reality.
Your Business Plan Needs To Be More
Too many business leaders think a business plan is a mandatory requirement that investors and clients want to see, which explains why they turn their business plan into a product plan that will tout exactly what it is they are selling. To avoid falling into the same trap, you need to realize that a business plan is as much for your benefit as it is anyone else. It is your chance to plan exactly how you are going to scale up so that you can follow this blueprint. The bonus is investor confidence. In terms of planning for scalability, a scalable business tends to have high margins, low support, and fewer staff.
Build The Right Team
It is one of the most overused phrases in the world of entrepreneurial advice, but you need to be working “on” your business not “in” your business, which is where having a strong team comes into the fold. It is only when you have the resource and time to focus on your business that you will be able to scale. It’s like this, you won’t be able to focus on growing and scaling if you have to be everywhere and make every decision in your business. It just doesn’t work like that. Instead, you need to work on hiring the right people and training up your employees so that your business can run without you having to helm everything that goes on within your operations.
Time To Think Tech
It is one of the most overlooked areas when it comes to launching a business because people think planning for the future is expensive. That or they decide they will cross the growth bridge when they get to it; a decision that will only work against you when you are trying to boost your revenue and size. We’re not saying you need to give every employee the most expensive MacBook money can buy, just that certain technical decisions need to be adopted early on, such as using cloud hosting services, understanding which collaboration tools will best suit you and how to promote remote working as efficiently as possible. All of these are growing trends and it won’t be long before the entire business world operates in this way. Not only that, but these are also becoming more important variables in the eyes of employees, and employees will forever remain your most important asset.
Outsource Everything That Isn’t Strategic
Ask any entrepreneur what they think about outsourcing and they will likely agree that it is fantastic and imperative to scaling up. However, they will also drop in a caveat about what you outsource. To give you the short story: you should never outsource your core competency, nor should you ever rely on intellectual property that they don’t own outright. Anyway, the days of doing everything in-house are gone. Maybe not for those at the very top of the food chain – the big businesses – but for them, it makes more sense both in terms of cost and scalability. For you, though, a startup, growing a team of in-house experts will be slow and costly. What you should do instead is build a pool of freelancers and contractors you can rely on should business require their assistance. Copywriting, bookkeeping, graphic design, IT support and anything else that falls within this bell curve. Scaling up requires leveraging outside resources, remember that.
Make Everything Automated
You are never going to have the time to grow if every part of your business is labor and/or staff intensive. That is why you need to educate yourself on how to make your operations and productions automated, which can be done through process technologies and minimum staff approaches from the earliest stages possible. It could be that you automate your invoicing and payment systems, you could use online training videos to help with your onboarding process and even use digital learning solutions to keep on top of employee progression. The more you can automate the more time and resource you will have to spend on scaling your business and growing your revenue.
As you can see from this list, designing your business to be scalable so that you can present it as such to investors is not the only reason you need to consider scalability. It is a way for you to multiply the amount of arms and legs your business has, while also maximising the amount of hours you get in the day. Basically, you should consider scalability when you are starting out because, well, you never know what the future holds.
