9 Common Mistakes When Scaling Your Business

Many start-up companies dream of rapid growth, but this process can be as dangerous as financial stagnation. In the early stages of business development, entrepreneurs inspired by their first success risk losing touch with reality and believing in their limitless abilities. This results in a number of mistakes that gradually accumulate and begin to drag the company to the bottom. 

Below are nine blunders that are common in fast-growing organizations. Avoid them to ensure the success and stability of your business.

1. Weak business model

Before scaling up your business it is recommended to make sure your business model is viable. Many companies, who get several customers, think they can easily handle 20-30 customers. However, this is only possible if you have sufficient resources, infrastructure, and financial capital. 

For novice businessmen, it is easy to fall into euphoria looking at how the number of orders increases every day. At the same time, the entrepreneur must be sure that attracting each new customer is really profitable, and not wasting the resources of the organization. The increase in the number of clients leads to additional expenses for the maintenance of personnel and the purchase of equipment. Make sure they are justified and allow you to increase your income.

2. Lack of long-term goals

Most startups set themselves short-term goals - a maximum of one year, and at best 3-5 years in advance. This often happens because businessmen do not want to be tied to large tasks and seek to free themselves up as much room for changes as possible. But this is the wrong approach. 

All your goals should first and foremost rely on a long-term strategy based on the mission and values ​​of the company. Having chosen the main direction, you must coordinate all your actions to it. Do not be afraid to set long-term goals, because they help you choose the right path and make the right decisions.

3. Ignoring marketing

When you go to market, you can get a small audience without any marketing costs. However, if your company is interested in growth, you cannot do without investing in advertising. The sooner you start investing in advertising, the easier it will be for you to win new customers. At the same time, you need to use as many communication channels as possible: if you step in one direction, you can quickly exhaust this resource, and then spend a lot of time mastering a new one. 

4. Lack of strategy

As a company gains traction, the day-to-day challenges faced by management become more challenging. Under psychological pressure, managers can make the wrong decisions, which leads to stunted growth. To cope with the increased workload and not waste energy, the organization must have clear goals. 

Most start-up companies fail when trying to reach many markets and launch many products at the same time. Don't repeat their mistake: focus on what you do best and conquer your audience. 

Managers always need to have a strategic plan. It can be an A4 document describing what mission the company is fulfilling and what goals it should achieve. It can also include metrics that help each employee measure their own success.

5. Lack of infrastructure

Scaling involves many challenges, one of which is infrastructure expansion. At some point, you may need, for example, a larger office, new equipment, and modern computer programs. At the same time, the absence of one of the important components can lead to a decrease in productivity. It is recommended to pay more attention to the IT infrastructure that provides automation of processes, data storage, and communication between employees. Today artificial intelligence controls almost all working functionality, so the company's cyber system must be well configured and protected.

6. Pleasing customers

At the stage of rapid growth, it is tempting to please every client. However, if you implement such a policy, you will waste your resources, which can lead to significant customer loss. As the company scales, you may allow customers to set their own terms and schedule appointments at their convenience, but this will ultimately turn out to be a logistical collapse and reduce your productivity.

7. Poor recruitment

One of the common mistakes startups make during a boom is poor recruiting. When your startup grows rapidly, you try to find as many new employees as possible to handle the increased workload. However, in a rush, you run the risk of hiring people who will not be able to match the spirit of the company or even negatively affect other employees. This can lead to reduced productivity. If you need a tax specialist, be sure to hire an experienced accountant to avoid possible problems with taxes.

It is better to invest in the development of your team than to look for candidates on the side. An illiterate selection of personnel can negate all efforts to build a team. To prevent this from happening, it is recommended to pay more attention to developing managing skills and leadership qualities in employees. If you need new employees, then, whatever the urgent task, carefully select and do not skimp on high-quality specialists.

8. Striving for total control

During the growth of the company, some executives make a serious mistake: accustomed to controlling, they are confident that they will be able to continue to independently monitor all processes. But instead of controlling every area, focus on the strategic management of the company. At the same time, appoint employees who will be responsible for the work of a particular area. So you can support the management of the organization and receive first-hand information about what is happening within the team.

9. Dogmatism

While long-term strategy matters to a company, you shouldn't treat it like a dogma. The modern market is unpredictable: today you feel comfortable, and tomorrow you may face a crisis or a new formidable rival. In a critical situation, you do not need to become hostage to your own rules - adjust them depending on the situation, ”says Harnish. At the same time, the entrepreneur recommends making strategic changes only if necessary: ​​do not blindly follow trends - stay true to your course, since you know better than others what your business needs.