Four Reasons to Get Ready to Scale Up as You Start Uphttps://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 Frumi Rachel Barr Frumi Rachel Barr https://secure.gravatar.com/avatar/7a2407752a400f54696416652a1981e6?s=96&d=mm&r=g
Scaling your business may seem like a long way off. After all, you have concepts to finish, prototypes to create and money to raise. Why worry about scaling now?
I am sure I can share many more than four reasons to start now and I don’t want to frighten you. I do hope to inspire you and galvanize you into taking the right actions to prepare for scaling up. Here they are:
1. The mistakes you make when you are small have a greater impact on your viability than they will when you are a big organization. In large companies mistakes may go unnoticed, but when you are starting out every decision you make counts. The people you bring on board, even for sweat equity, the strategy you set, and every dollar you spend must be carefully strategized.
2. Once you have hired members for your team, some of which may be your college roommates or your family members, it’s really hard to make them “available to industry” later. It’s great to hire your brother-in-law as CFO, yet at this stage you only need a bookkeeper and offering the lofty title of CFO will no doubt present a problem later. Now it could be that your brother in law will grow into that position but if he doesn’t, then how will you demote him without hard feelings? At 10 million you will need a different level of expertise.
3. If you don’t lay the right foundation, execution of your big idea may make your dream turn into a nightmare. Planning and executing while at the same time dealing with all the unknowns that crop up, is the biggest challenge in business. Execution is about turning your revenue into profit. In order to execute well the disciplines of setting priorities, measuring performance and a rhythm of the right kind of meetings is important and this degree of discipline is extremely rare. Developing and executing a strategy that is balanced in both growth and profitability is a difficult and necessary task.
4. Chances are you’ll run out of money and you have no time for those kinds of lessons. You only have so many resources. You may have borrowed money from friends and family, and the dream you shared encouraged them to open up their check books to you. They believe in you. And now you have to perform. You know the funds were not a gift. Every entrepreneur believes they have the next great technology, service or product to change the world. What do you need to do to validate your idea? Do it first. Don’t spend all your time on writing a lengthy business plan for Venture Capital firms. Instead write a one page plan outlining all the processes, people and actions to take. Then get out there and validate that your target market wants what you are creating. Otherwise you’ll burn cash and just as in the game of Monopoly, when you run out of cash, it’s game over. There is time for the perfect pitch deck and business plan once you have validation.
Actions to take: Review your plan quarterly. Treat each quarter as a 13 week race to accomplish the goals you set. Make sure your goals are SMART (Specific, Measurable, actionable and Time –Bound). Find a thought partner, a strategic thinking team, or a peer group. Don’t be afraid to ask for guidance. Look around you – who do you know that you can reach out to? Plan your scale up as you start up.