Coming up with a new idea, and launching your startup is one thing, three entrepreneurs do this every second. This amounts to a huge 100 million new startups launching every year. Actually taking the action steps to transform an idea into a sustainable business and scaling is a very different story. Almost all of these new businesses will stagnate and fail. It’s less sexy, but setting up stable foundations for building a new enterprise means the difference between next-level success, and fizzing out.
2016 looks set to be a sobering year for the growth of startups in the world in contrast with the highs of 2015. Propelling a business this year will rely on much more of the blood, sweat and tears of a leader with reduced financial backing and external support. The New York Times has also drawn attention to this startup bubble, explaining that, after the dizzying heights of 2015, gaining VC and scaling is going to be much harder this year.
Scaling a business can be a gradual process of achieving milestones. This could involve moving to a bigger office, readdressing your core data systems or launching new services. The process of building requires hiring smart team members, providing the grounding and standardization of robust processes and services, pushing your business out to market, and setting your targets high.
Timing is everything; try scale too early, and you could fall on your face, but too late, and you could miss the boat, or even end up drowning.
In this article, five entrepreneurs share their top tips for preventing stagnation and effectively scaling a business.
A business needs a solid foundation.
“My best advice for CEOs who are scaling up their startups is to focus on sustainability rather than speed. Build meticulous plans, recruit top notch employees with high potential, invest into appropriate training, and always verify that the quality of execution is to your liking. According to Goethe, ‘Fortune favors the prepared mind.’”
- Alon Rajic, Finofin LTD
Remember your core vision.
“When making large changes to scale your business, leaders should make sure that developments are also in support of their core visions. In my company, for example, to make sure we are always growing and do not stagnate, I frequently ask myself,
‘What can we be doing to solve problems for those who are looking to invest in a smarthome?’
This question helps me focus in on what is central to our business offering.”
- Jordan Wills, Cloud9 Smarthome
Explore your KPIs and barriers to growth.
“The most important thing to do when stagnation rears its ugly head is to not panic. Instead, verify what the problem is at its core. Business owners and executives often look at their businesses as if they were one-dimensional money-printing machines; however business growth is not always measurable through the profits and losses. It’s important to check all relevant KPIs and understand which ones are underperforming (or not growing), and whether the company is truly in a state of stagnation, or rather, in a temporary situation caused by external, unpredictable reasons.
Once you have verified your concerns and identified the problematic areas, you can initiate a process of reverse engineering to identify the underlying reasons for lack of progress.”
- Alon Rajic, Finofin LTD
“When we experience great success, or a period of inactivity, I ask myself, ‘Why? What is driving this, and what is the fundamental reason?’ A business leader should always be connected to the market, and ask themselves how they can constantly improve. Don’t be scared of change. Sometimes a large disruption within the company framework can be just the thing to propel a business forward and drive innovation.”
- Ali Benmoussa, Searchub
Be creative, and look to your team to also provide ideas.
“When critically assessing the growth of my business I need to consider what limits we have that would prevent growth. It is natural to look at outside influences such as new competitors and trends, or external contributing factors which could prevent scaling. However, first you need to look internally within the team. Examine your processes and communication. Are you employees motivated, and do they have a solution? We are all responsible for creating the business and driving growth.
I find it helpful to think outside the box when things are flat, so I ask, ‘If resources weren’t an issue, where would I be moving and what would I be doing?’ By removing these limitations, I can begin to think about a solution without borders.”
- Brodie Kalamen, Savvi Solutions Inc.