The myth of easy success
Founder, entrepreneur – it all seems so glamorous. These days it seems that the myth of the successful entrepreneur taking the germ of an idea and building an industry-shaking company has turned individuals like Elon Musk into celebrities, and has everyone chasing the holy grail of the scalable start-up. However, for every moonshot that works there are thousands that don’t make it past the first year or so. Being a founder is hard, but those that have made it have wisdom to share.
In this article we start out by defining what scalability means and how it can be measured. Then we share some top tips from founder experts who have managed to grow and scale their companies. While there is no one road to success, learning from others is one way to avoid easy mistakes.
How is scalability measured?
For a business to be scalable, it must focus on improving the profitability and efficiency of services even when its workload increases
We can measure the scalability of a distributed system or business in three main ways: size scalability, geographical scalability, and administrative scalability. These three forms of measuring how a system scales are often referred to as scalability dimensions
How do you know if a company is scalable? A soft guide.
A scalable startup is one that begins with a great idea that is turned into a profitable business that is poised to expand exponentially. The unicorn-like startups often grow rapidly into huge, scalable, and profitable businesses despite their limited resources. Innovative startups often not only go on to dominate their niche, but redefine how that niche operates, opening up new business opportunities for everyone involved.
In hindsight, it is often easy to pick out the startups that have that something extra that will allow them to scale. Scalable businesses start small then grow rapidly and overcome scaling startup challenges, unlike a small business, which often stalls. A small business could be paying the bills and keeping the doors open, but a scalable business grows to dominate its market.
How do entrepreneurs scale up? Top tips from Experts:
Now that we know theoretically what a scalable business should look like – how do we actually get our startup idea there? Let’s look at five tried and tested tips from business experts who have made it.
1. Have a clear business vision and be able to articulate it
Of course a personal vision and the drive to achieve it are important. However, a clearly defined vision for your business is crucial, and one of the building blocks of success. Working towards a unified and properly articulated vision for your business will allow you and your employees to work from the same script. It is an extremely powerful tool to achieve the results you want. Here’s why:
- A clear vision unifies your team behind one idea and allows them to work toward a common goal. Not only does this give deeper meaning to the work, but it also helps unify everyone into a team that is organized, focused, and working together to contribute to the vision.
- A clear vision can motivate and inspire, especially during times of pressure or internal change.
- It provides a solid goalpost for planning and defining KPIs
Having your vision front and center should inform all the big decisions that you make for your company, including the people that you surround yourself with. As the saying goes – hire and fire for your vision.
2. Set goals and track progress
Establishing company goals is a common business practice—and for good reason. Setting clear business goals influences motivation and increases performance, especially if there is positive feedback at the end. Let’s remind ourselves of one of the most commonly used ways of setting goals – the SMART acronym system.
A SMART goal is:
- Specific: a specific goal is clear and not open-ended
- Measurable: There are specific, measurable targets that can be achieved
- Attainable: The goal matches your skills and can realistically be achieved
- Relevant: The goal aligns with the long-term vision of the company and the individual
- Timely: a specific time frame is attached to the delivery of the task.
Smart goals allow employees and management to manage expectations and measure results.
3. Build a great team - then get out of their way
A company might start as the germ of an idea in one’s persons’ imagination, but it takes a vital and energetic team to get that idea off the ground. One of the keys to building a scalable company is to surround yourself with team members that share your vision and will work alongside you in order to achieve it.
Successful team players typically have the following characteristics:
- Goal-oriented mindset
- Open to learning
- Responsibility and accountability
- Clear communication
Look for these characteristics in your next hire – and cultivate them in yourself – and the journey to success and a growing business is halfway done. Once you have hired employees that tick all these boxes, trust them to do what they are trained for. Don’t undermine or second-guess your top experts, as they will feel unappreciated and seek a better workplace elsewhere.
4. Maintain focus on the big picture
Having a big-picture perspective can help you prioritize effectively, set better goals and improve time management without getting distracted by unimportant events. As owner it is also part of your job to remind those around you of the big picture and the ultimate goal of your business (remember the company vision that we mentioned earlier?) and to keep them accountable.
Taking time away from day-to-day decision-making and crisis management is important as it gives you perspective and allows you to differentiate between tasks that are making the most noise and vying for your attention, and tasks that will move your business forward in line with your goals. This means improved time management and energy directed where it is needed most.
Go back to the drawing board often, and touch base with trusted advisors and mentors. While it can seem challenging to find the time in a busy calendar to set aside for big-picture thinking, it is critical to the ultimate success and scalability of your company.
5. Delegate tasks and put processes in place
Your business is growing, and you can’t do everything yourself anymore. Now is the time to automate repetitive tasks and delegate to the experts. If you are not ready to hire specialists in-house to assist you with certain functions, consider outsourcing for yourself and for your company. Outsourcing allows you flexible access to specialized services and expertise that you need in times of growth, without placing a burden on your payroll.
Process automation and adopting suitable software also saves time and energy and frees up your top staff to concentrate on the bigger picture instead of being chained to their desk punching data all day. At OCFO we are experts at implementing systems and using automation within various business functions in order to streamline your business processes and allow your company to make it to the next growth phase.
For companies entering the scale-up phase (read approximately 10 to 25 people), we offer flexible and cloud-based CFO services that can mean the difference between sinking or soaring. Focusing on more advanced financial reporting, more detailed cash flow forecasting and more in-depth value maximizing approaches, your new part-time CFO will help lessen the complexity burden of your early growth phases.
There is a significant global trend wherein entrepreneurs are starting to recognise the power and importance of leveraging cloud technology and business automation to successfully scale their businesses. OCFO uses expert CFO services, cloud accounting, and automation software to help scaling companies build world-class finance functions that can support the growth of their business. The OCFO team works directly with your scaling business to see where you can add maximum value and unlock the greatest number of new opportunities. If you are ready to scale, let’s talk.