We all know that launching a business can be challenging. In fact, with statistics telling you that there’s a 50% chance your big idea will fall flat on its face in a few short years, getting started can feel like betting on a losing horse. That’s why it can be so thrilling when your company and products become an exception to the rule, and manage to cement themselves with a firm audience and a steady income.
But you’re a determined person, and getting to this stage in the first place is a testament to your ability to think big. So, you’re probably not happy to remain in the small business trenches – you likely have your eye on the bigger prize of business scalability. And it makes sense – growing up is the only way to truly make a go of what your company has to offer.
There’s just one problem, and it comes in the form of what McKinsey has aptly termed ‘the scale-up conundrum’. In a recent survey, McKinsey discovered that 78% of businesses with a successful product and accurate product market fit (PMF) fail to scale, resulting in high chances of overall company failure. That’s a hard pill to swallow, and it can leave even a budding business stalling on the ground.
Luckily, if you’re in that position right now, McKinsey has laid out a blueprint of sorts for finally getting things moving, and we’re going to summarize the key points here!
# 1 – Getting Your Cockpit in Order
If an airplane fails to fly, the issue often stems from the cockpit, and McKinsey theorizes that the same is true from a business perspective. If you’re struggling to grow your enterprise, then you need to look at what’s driving your company right now. Or, in this case, what’s not driving your efforts. According to McKinsey, there are three main cockpit areas deserving of attention here – your talent, tech, and team leaders. The three t’s, if you like. But how exactly do these things prevent you from scaling? Well, there are a few different problems to look out for.
Tech is an especially prevalent problem right now, with countless small companies struggling to achieve scalable tech and data architectures, making scale-up essentials like high-speed processes and automation difficult to come by. These problems become more pressing the more you attempt to scale, and highlight the need for affordable, intuitive systems. But, affording these things isn’t easy, which is why companies at the growth stage should consider priorities like outsourcing managed services such as Fresche’s IBM i Cloud, which stands to boost performance and upgrade everything your company is doing for less.
From a talent and leadership perspective, scale-up essentials include forward-thinking, experienced management teams who know how to scale on a granular level, and hiring processes that prioritize culture and training over expensive acquisitions upfront.
# 2 – Egging on Your Engine Power
Let’s say the pilot on the plane is hooked in, ready to go, and has all of the knowledge necessary to get that thing off the ground, but something still isn’t right. You’d look at the engine, wouldn’t you? Well, the same rules apply when it comes to helping your business fly. But what exactly does your business engine consist of? According to McKinsey, key areas of engine room focus include your product itself, your manufacturing processes, and your overall customer success.
Your products are an obvious place to start here, but remember that this study largely considers companies that already have a strong product and a market for it. So, where exactly is your product going wrong? Well, that can be a tricky thing to understand, but it largely comes back to your R&D (research and development). After all, you can have a strong product, but scalability will never exist if you stick with that initial idea. You certainly won’t achieve customer lifetime value (CLV) that way. Instead, products need to evolve, and scaling ultimately means planning, testing, and developing, preferably via manufacturing processes that are fit for growth, even if that means offshoring or complicating your supply chain.
Sales also matter here. On the one hand, a scalable engine room requires an ever-evolving sales team that both expands business reach and grows to understand nuances like market fluctuation. On the customer end, finally getting your business growing requires a focus on CLV, as mentioned, which revolves around everything from product development to trusting relationships, and overall consumer satisfaction.
# 3 – Putting Your Foot on the Accelerator (Or Easing up a Little!)
So, your pilot’s in place, your engine is humming along nicely, but you’re still not going anywhere. Luckily, this is often simply an issue of not putting your foot on that company accelerator. This is the thing that’s going to speed you into the scalability stratosphere, but it’s not something that can take care of itself.
Rather, true company acceleration rests on a few key factors, including geographic expansion, partnerships, and even acquisition. Each of these priorities circles back to one thing – expanding your business reach. The more people have access to, or are drawn to, your products, the faster and further your company stands to grow.
However, there is a flipside to all of this – attempting to accelerate too fast can also leave you broken down with nowhere to go. This is an especially important point right now, in an age where going viral seems like a sure path to growth. In reality, going viral early in your business journey can see you growing too quickly, leaving you unable to meet demand, and also resulting in impossibly high consumer expectations. Instead, remember the adage – slow and steady wins the race. By all means, hit that accelerator, but make sure you stay within the scalability speed limit!
Takeaway
Getting stuck in the scale-up conundrum just when your business dreams feel like they’re coming true can seem like a cruel fate. Luckily, you can still send your business soaring with these key considerations.
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