Upscaling a small business involves having the right people in the right places, all working with a plan under the right culture.
Upscaling from between $1 million and $2 million to double or triple your turnover or significantly expand your company is not something that will happen by chance or in the natural course of growth. There are many obstacles that stand in the way of growth to this size and, without the right strategies to overcome them, few will make it.
However, the keys to upscaling that are outlined here will enable you to navigate the challenges along the way and grow a successful company.
Strong foundations
Whether you wish to take your business from $1 million to $2 million, toward $10 million, or somewhere manageable and profitable in between, it all starts with a shift.
Strong foundations are essential for stability and structure so upscaling becomes possible. Without these foundations, your business will be mired in complexity. You as the CEO will feel that nothing is in your control, and it will be hard to course-correct when the destination is hazy.
“The goal is to have the right people throughout your business.”
Having access to accurate and timely numbers is a non-negotiable when it comes to running and growing a business. Knowing which parts of a business are profitable and which are potentially costing the company money is essential. Understanding the profitability of key clients, products and services, consultants and advisers, for example, will enable the CEO to identify areas to be addressed and make corrections to get back on track.
Core processes underpin the company’s foundations, as once the business grows beyond $2 million, there is too much complexity to keep it all in the head of the owner without problems arising. By mapping out core processes, the business will become more efficient in how it operates, reducing the likelihood of ‘throwing people at problems’ and adding resources that may not be needed.
This is all essential if the business is to grow.
The right people
In any team there are the stars, the solid performers and the occasional bad egg. The goal is to have the right people throughout your business. The bigger the business gets, the harder this becomes. However, if you have a solid process for recruiting new team members, consciously focus on having the right people in the right roles, and develop and lead to grow and maintain this team, you will create an ‘A-Team’ that helps drive the business on its upscaling path. An evolved CEO and an A-Team will create a positive and transformative culture.
As a business grows, the roles that previously existed may no longer be appropriate. More experienced people come on board and roles can be restructured to suit the changing needs of the business and the expertise of the new recruit. Equally, new capabilities may be provided by remote teams, contractors and other more flexible resources. It is still important to ensure they are the right people for your business.
Having a capable team will enable the business owner to make the shift from ‘doer’ to ‘leader’. This is an important step for growth. Standing in the way of this step is The Capability Gap, which can cause a lot of problems in growing businesses. It occurs when the gap in capability between the owner of the business and the next most experienced person is too big. The inexperience gap results in questions and problems reverting back to the owner, who is the only person with enough experience to address certain situations.
Once the right people are in place to fill this gap, they need to be aligned with the company’s goals, so everyone is working toward the same purpose. The business and the owner will then have the necessary support structure to grow further.
A clear plan
A company needs a clear game plan to upscale. A clear plan is visible, documented (text, images or both – whatever works best) and holds everyone accountable for contributing to the company’s desired goals and results.
With alignment between people, processes and a clear strategic plan, business growth will build momentum. The Strategy Roadmap™ plots out the future and the steps to get there.
There are many reasons why a clear plan provides a strong foundation for growth:
- It is the bridge between the vision and everyone’s day-to-day activities – it identifies what needs to be in place for the vision to be achieved, which drives the team’s operational focus.
- It provides a framework for strategic decision-making. Companies turning over 5 million can still be confused and uncertain when making decisions about what to focus on for growth.
- It provides action steps for what has to be done in the short term, along with a more aspirational pull toward a bigger picture. It inspires, guides and measures progress toward new growth and opportunities.
- It provides clear direction on strategic priorities.
Without a clear plan, it is difficult to know what specific goals and achievements to focus on.
An enabled culture
People are attracted to – or leave – companies because of the culture. Culture, of course, incorporates a wide array of factors, such as purpose, values, leadership, respect, communication and behaviour. Today, we also need to factor in flexibility. How important are all these factors to your people, and why?
Gartner research of 5000 employees conducted in 2021 found that businesses focus too much on what the company gives the employee, rather than why. The research concludes that value comes from feelings, not features. I think this point is critical. How does working for your company make your people feel?
Having a strong focus on culture, and understanding what it is and how it makes your team feel, will help a company grow successfully.
An enabled culture is the culmination of all the elements discussed here, plus that something extra. When you have the structure in your business that enables each person or team to do their job and know they are doing it the right way and adding value, and when you have the right people in the right roles and a clear strategic plan as a roadmap, then your culture is enabled.
Enabled cultures exist in evolved companies, in which the owner has made the shift to CEO and truly values their people and the importance of manageable growth for positive results. When there is the added depth of a compelling purpose and vision for everyone to be involved in and excited about, that energy propels the business and its team forward into success and fulfilment.
Companies without an enabling culture will still grow but will lack the same energy. I think we’d all prefer to be part of the former.
This story first appeared in issue 41 of the Inside Small Business quarterly magazine
