It’s an exciting time for any fledgling enterprise: After bleary evenings at the keyboard, the splash of sobering cold calls, and a balanced diet of ramen noodles and taurine, this thing is really happening.
Your early clients are buying more and making all the right introductions. There’s buzz, a PR win or two, a steady stream of new clients. The revenues are pouring in, and maybe you’re even profitable. You’ve bagged the golden goose that entrepreneurs across Canada are tirelessly hunting – a proven business model. And now you’re ready to reap the rewards.
But before you start building an empire out of your ramshackle outpost, make sure you have a clear plan to scale the business. That first attempt to venture beyond proof-of-concept is the most crucial – and most dangerous – phase in the life of a small business. Half of your peers will go belly-up before their fifth birthday.
Here’s how to make sure you come out on top.
Learn to delegate
Part of the thrill of building a startup is getting your hands dirty in every corner of the business. In the beginning, you and a core team are handling sales, marketing, finance, HR, IT and more, while making sure you don’t run out of printer paper. The biggest change as you scale from a startup to an established business is the breadth of direct control you’ll have. Focus on where you add the most value, and get help with the rest.
Don’t grow beyond your ability to measure
Your business model is going to change as it scales, and you’ll need to adjust the indicators you track. Broad swathes of your balance sheet are going to shift as your methods, margins and cost structure slide around looking for their final resting places. It’s crucial in this stage that you develop ways to measure the success of your growth plan – if things aren’t adding up, you need to know as soon as possible so you can adjust the course.
Take it one step at a time
You’ve already seen some success, but the notes app on your phone is a jungle of ideas for improvement and expansion. Push to increase sales volumes, or try offering a new product or service, or grow your production base, or expand into a new market – but don’t do them all at once.
Even the most successful ventures will experience ups and downs on the way to the top, so make sure you’re ready to absorb both. This means building flexibility into your workflow: go to external vendors when appropriate, draw on freelance help in times of high volume, or build a just-in-time pipeline. The hardest part of rapid growth is making sure you’re able to surf the waves as they come, without over-investing to the point that the slightest dip sinks your balance sheet.
Calibrate your growth to your risk tolerance
You wouldn’t have chosen the entrepreneurial path without a borderline-sociopathic level of risk tolerance. But every business owner has a different appetite, and you shouldn’t let the temptation of rapid growth pull you beyond the risk level you’re comfortable with. There are a million business opportunities ripe for exploitation that you’re “missing” every day. Don’t sweat that. Grow at your own pace, ensuring that all along the way you have strong products and satisfied clients.
Don’t forget about your base
Growth is exciting, but it’s easy to lose sight of the core elements that made your business what it is today. You have a core product that you’ve proven is viable. Innovate and iterate as you look for new and larger opportunities to exploit, but make sure you maintain those parts of your business that are tried and true. The same goes for your core cadre of “sponsor clients:” those early customers whose loyalty and advocacy are well worth the preferential pricing you still extend to them.
You’ve built a thriving enterprise that’s proven its value and found a niche in a challenging marketplace. If you can stay true to the core value you provide to your customers while being open to the radical changes your business will undergo, you’ll never eat soup from a cardboard cup again.
Nick Haffie-Emslie is a managing partner atVMG Cinematic, a Toronto-based digital agency specializing in online video production and social media marketing. It has been recognized twice in the Hot 50 list by Profit magazine as one of Canada’s top new growth companies.