Although there is no generic formula for scaling up a business, there are common behaviours shared by entrepreneurs that rapidly grow their operations and are able to compete globally.
Heather Lowe, Head of Enterprise and Supplier Development at FNB Business says every entrepreneur aspires to attract more customers, increase profit margins and grow revenue by expanding their business. However, scaling up a business is often more challenging than it seems.
Lowe, having worked with a number of businesses with high growth potential, through the Vumela Enterprise Development fund, has identified four common scale up disciplines that are often overlooked by businesses:
Getting external guidance
Even though business owners may assume they know everything about their market and are highly qualified academically, this does not mean they can easily scale up.
When most entrepreneurs embark on the scale up journey, a few interactions with experts quickly help them discover exactly what they do not know. Almost every single entrepreneur is often overwhelmed by how much they do not know, even in already highly successful businesses. This is why external guidance is essential.
Less dependence on the business owner
It is critical to step out of the business in order to work on growing the business. There is a difference between working ‘in the business’ and ‘on the business’. This means building the business to a level that it can operate without you being the critical component of success.
Alternatively, the business can never scale up, as it will always be dependent on the owner being there to operate efficiently.
Willingness to be coached
Executive management must be willing to be coached and accept if they do not have the appropriate skillset and personality to scale up a business.
The skillset and role of a CEO in a start up differs to that of a scale up. Many businesses struggle to scale up because start up CEOs often have limitations but refuse to accept or admit this due to the fear of failing.
If the entrepreneur does not accept that a different approach may be required, it will almost be impossible to scale up the business.
Wellbeing of the entrepreneur
Failure to tolerate or prepare for the stress levels and complexity that come with scaling up are some of the reasons why many entrepreneurs cannot successfully grow their businesses.
“Over working yourself, neglecting customer relationships and inappropriate prioritisation often taint the business in the long run and can be a huge setback for entrepreneurs,” says Lowe.
Entrepreneurs need to manage their lifestyles and understand the consequences of neglecting their wellbeing as this can filter into the business.
“There are no quick fixes to sustainably growing a business to the next level. Scaling up is a journey that requires hard work, total commitment and the willingness from business owners to be guided on how to develop the necessary traits and disciplines necessary to succeed,” concludes Lowe.