The difference between a successful business and one that closes is: execution. Find out what separates those startups that succeed from those that don’t

Scaling is one of the favourite verbs of any entrepreneur. In the business world, scaling is the process of expanding and growing a business quickly and efficiently, increasing its revenue-generating capacity without proportionately increasing costs. Simply put, it involves multiplying its size, scope and profitability in a sustainable way. Scaling translates into accelerated and exponential development that allows a company to capture new market opportunities and maximise its potential.

However, not all startups are inherently scalable. To achieve this, a combination of factors, such as smart strategies and a visionary entrepreneurial mindset, is required. Some business models are designed to work well on a small scale, but can become less efficient as they grow. These tend to be those that rely on the exchange of time for money, as the former is limited. In these cases, they depend on the ability to hire new employees, a task that must be done with vision and economic viability in order for the option to scale to exist.

Even so, most startups are designed to be scalable from birth. Those that do have the potential to grow quickly and make a significant impact on the market share certain requirements, such as not being time-dependent, not being limited to a single market or using technology, among others. How do you know you are ready to scale? There are several situations and indicators that push you to do so, as well as opportunities that arise in more or less expected ways. Check out the article by Adam Jacobs, CEO of Bubblegum Casting & Hunter Talent, to spot these moments and take advantage of them.

To get to the point of being scalable and ready for the process, it is important to keep these 7 recommendations in mind:

Scalable business model

The business model is practically the definition of a startup. As Steve Blank, American entrepreneur, teacher, author and lecturer, argues, “a startup is a temporary organisation designed to pursue a repeatable and scalable business model”. Therefore, the company’s operations should be easily repeatable and scalable without requiring substantial additional resources or suffering from significant structural constraints. So it is key to invest early on in building an organisation that will eventually deliver more solutions than problems, with a clear value proposition and the identification of an objectively broad market. It is essential to have a vision of the future, to intuit and anticipate possible difficulties. Likewise, as the company grows, it is necessary to have the appropriate technological, operational and logistical infrastructure to support the increase in demand. An undeniable example of the importance of having a scalable model is the founder of Amazon, Jeff Bezos. The American went from owning an online bookstore to completely dominating the retail industry.

Focus on market and customer

As we have already advanced in the previous point, understanding the needs and wants of your target market is essential to scale. To achieve this, you need to conduct in-depth research, collect data and analyse feedback from your audience to continuously adapt and improve your product or service. Therefore, it is important to understand in detail the market niche you belong to and what your competitive advantage is over your competitors. It is essential to solve a real problem and to have a sustained demand, which should always be a priority. To learn more about the customer-market relationship, identifying the traction channel and the price conundrum, we recommend the article by Saravana Kumar, founder and CEO of Kovai.co, a company in the enterprise software and knowledge management sector.

Build, train and nurture a stable and diverse team

The structure of your team will largely determine the success of your business. It is essential to attract and hire the right people, because they will either enhance or hinder the work. For this reason, you need to look for talented, passionate and committed people who share the vision, strategy and culture of the company. These ideas are highlighted and developed by Jim Collins, in his book Good to Great, and Daniel Coyle, in The Culture Code. Both authors agree that all employees must be motivated and aligned with the values of the business in order to build a healthy and confident team. In addition, it is beneficial for each team member to have different and complementary skills, which will contribute to personal and business growth. In fact, it is not only useful to have people of different skills, but also of different gender and ethnicity. According to research by management consultancy McKinsey & Company, companies with greater gender diversity are 25% more likely to be more profitable, and 36% more likely to be ethnically diverse. Diversity brings diverse perspectives and experiences that contribute a broader range of ideas, creativity and approaches to problem solving and decision making.

Ability to be able to innovate and know when to do so

It is essential to adapt quickly and correctly to changes in the market, as maintaining a culture of continuous innovation, always valuing the incorporation of new technologies, is fundamental for scaling with notoriety. However, it is also important not to lose sight of the product or service you already offer. The company must be able to assess the application of this innovation as soon as possible and be prepared, at the same time, so that it does not affect the development of daily work. This idea is discussed by Saravana Kumar in the article shared above, arguing that “scaling prematurely is one of the biggest mistakes companies or entrepreneurs can make” and that “it is essential for companies to take calculated risks”. There are several signs that it is the right time to scale and in this text, Scott Gerber, founder of the Young Entrepreneur Council (YEC), sets them out with contributions from 15 YEC entrepreneurs.

Gain access to finance

There is often a need for capital in order to progress. For this reason, it is necessary to find significant sources of funding to support this development, such as business angels, venture capital, grants or crowdfunding platforms. To obtain them, it is essential to draw up a solid business plan that is capable of transmitting confidence and demonstrating the company’s potential for profitability. In this text, Daniel Isenberg, CEO of Entrepreneurship Policy Advisors and adjunct professor at Columbia Business School, and Daniel Lawton, president of Promentis Pharmaceuticals, provide some keys to avoid dying in the attempt. Here is an article about what you need to be investable.

Have a communication and marketing strategy

Over time it has increased the value given to this department, vital to attract new customers and promote brand growth. In addition, it contributes to differentiate itself from the competition, generate demand (provoking interest), build and maintain strong relationships with customers and adapt to the digital environment to take full advantage of the opportunities it offers. Karen Parisi, CMO of CentralReach, provides some of the main marketing strategies that will help your company progress and get closer to success in this article. Ultimately, by investing in a competent marketing team, you’ll be laying the foundation for sustainable and successful growth.

Exploration of new markets and geographical expansion

This decision is usually made when the business has reached a certain stability. As it gains momentum, it may be beneficial to consider expanding into uncharted markets and diversifying supply. In order to do this, it is essential to carry out transcendental research to, apart from adapting to local regulations and laws, identify growth opportunities in which your product or service fits and meets additional segment needs. Expansion also allows to diversify risks by having presence in multiple sites, which helps protect the business from potential difficulties in a particular market. The potential benefits usually outweigh the challenges. Max Azarov, co-founder and CEO of Novakid, an online artificial intelligence platform that provides personalized English learning for children from 4 to 12 years through gamification, provides some tips to make the expansion the best possible.

The figure of Verne Harnish and Scaling Up

If we talk about scaling, it is mandatory to appoint Verne Harnish, recognized expert in business and business growth, who has left a significant footprint in the field of business scalability. He is the founder of the Entrepreneurs’ Organization, which has more than 16,000 members around the world, and of Scaling Up: A Gazelles Company, a global training and executive education company with more than 200 partners on six continents, of which he is executive director. He is also co-founder of Bcombinator.

He is also a writer and one of his most outstanding works is Scaling Up (Rockefeller Habits 2.0), which has been translated into 22 languages and has won important international awards. The book is a practical and strategic guide to help businesses grow cost-effectively, sustainably and efficiently.

The American leader was in Bcombinator last Thursday, May 25 at Bcapital Day of the month. Enjoy expert input on our YouTube and Spotify channel.

Apart from the conference, we leave you the 4 key points on which the methodology of growth that exposes in its most recognized copy focuses.

1. People: It is essential to have a suitable team for the growth of the company. How is it achieved? Hiring and maintaining talented and committed people. To do this, it is necessary to align them with the vision and values of the business, in addition to providing them with a support and satisfactory environment. All this will contribute to establishing a strong business culture, which will foster collaboration and leadership.

2. Strategy: It needs to be very clear for successful growth. To achieve this, goals must be set, key business drivers identified and competition and market analysed in depth. It is also important to adapt to innovation and to facilitate a changing business environment.

3. Implementation: Once the strategy is defined, effective implementation is crucial to achieving the expected results. To do this, we must implement efficient systems and processes that allow for agile and high quality execution. In addition, account must be taken of accountability, measurement of results and constant monitoring of the development of the activity. 

4. Cash: Highlights the value of correctly managing cash flow to maintain the financial health of the company. This requires the implementation of sound financial practices, such as working capital management, forecasting and prudent expenditure management. To this, we must add the constitution of clear financial metrics that serve to make informed decisions.

Ultimately, by focusing on these vital areas and establishing effective perspectives on each of them, organizations can achieve sustainable growth and increase their chances of success. If you are interested in reading Verne Harnish’s Scaling Up, we leave you the link to get it: https://scalingup.com/book/.