5 Holes That Could Sink Your Scaling Business
What sinks a small fishing boat isn’t always a gaping rupture in the side but a number of smaller, less obvious holes left unchecked. As single holes they have little impact, but combined it is more than the boat can handle to stay afloat. For businesses trying to scale, a similar progression can occur when issues are left unaddressed, and the result on the business could be the same unfortunate demise as the boat.
It is the failure to recognize these smaller holes that that can often be most detrimental. With that in mind, here are five issues that can often challenge businesses trying to scale. Just like the small holes in a boat, they are not always easy to see. You may not have all of them, but failing to address even one may be sinking your business.
1. Hole in Core Values
Many businesses do a great job defining their values early on, but fail to breathe them into the business on a daily basis. Instead of becoming part of the fabric of the business, they get lost in the growth. Every employee should know the core values that will guide the business into perpetuity. A business that is scaling should hire, fire and review with a focus on core value alignment. It will fuel your company culture. Sometimes, the actions you’ll have to take to plug this hole will be difficult. For example, you may need to let some long-term staff go if they
aren’t on board with the changes that growth brings.
2. Hole in Management Team
When a business is first getting started, often there’s an “all hands on deck” approach to getting things done. But as your business scales, no one will be clear about who is accountable for what if you continue to operate that way. Organizational charts with names in boxes are great for setting an overall structure of a business, but they do little to set the stage for the autonomy often required in a high-growth business. Consider dumping the traditional organization chart for an “accountability chart.” Every major function gets a box and one name and that person takes ownership for that role. Don’t sweat it if some names are in multiple boxes. As you grow and scale, you can simply replace names in boxes with new members of your team. A caveat here: The people you hired initially may not be the best choices to fill the management positions your growing company requires. Don’t make the mistake of promoting someone simply because of loyalty or longevity.
3. Hole in Product or Service
Just because you love the new idea you’ve come up with to grow your company doesn’t mean the world will. It is a cruel reality. For a product or service to successfully scale, it first needs to be something that lots of people really want and are willing to pay for. There are three ingredients that are very indicative of a product’s or service’s potential to scale. Is it teachable, valuable and repeatable? If you answered “no” to any one of those, you may have a hole in what you’re trying to scale.
4. Hole in the Systems and Processes
When there are too many functions being completed on brain power alone, you’re at risk. It is fine as long as the brain power is there 24/7 and you can clone it every time you add a new location or increase capacity. But that isn’t reality. Workers can’t read your mind and automatically know what to do. Ray Kroc didn’t invent the hamburger; he just scaled a process that made sure it was the same no matter where customers bought it. If your processes are not documented, there is no way you can scale your business.
5. Hole in Finances and Projections
Make sure you have a handle on your finances and projections. Cash flow planning is paramount for a business that is scaling up. This dragon has a lot of heads. You must understand your numbers enough to know how financially sound your business is and if your results are meeting your projections. Also, companies in high-growth mode track different metrics. For example, a business in growth mode should be more concerned about the ratio of new customers to existing each month, not the actual number of new customers per month.
These are only a handful of the many holes that can sink a business trying to scale. But, they can sink a company regardless of its industry. If you’re trying to scale and having issues navigating the waters to the next level, take a closer look under the deck to see if one of these five holes is letting water in your boat.