Challenges Of Scaling A Business | Digital Dreams Limited

caling a business isan overused term that many users dont really know what it means. You may thinkyou are scaling your business because your customers are increasing and morepeople inquires about your business. Your business scales only whenit has achieved cost effectiveness.

What do I mean? Ability to producesomething at the least cost. In essence, if your customers are increasing andyou are not able to meet their demands at the least possible cost then you arenot scaling yet.

For a business toscale, you must be able to produce goods and services while keeping theoperational cost low.

Scalingbusinesses tend to face a lot of diverse challenges. Deciding to scale yourbusiness can be both exciting and devastating. Because as a business grows, itis faced with different problems and opportunities that demand different andcrucial solutions and approaches.

Scalingis an entirely different business environment, it?`s more than just entering an advancedrevenue growth. The difference with scaling is that the game changes so fastand often affects everything, starting from your people to your system (theyall tend to change and adapt). At this point, you need a core vision of whereyour company is headed and you need to know what your values are, what you willand wont do to succeed. And as you bring in new employees, make sure everyoneknows what your company?`s core values are.

It isvery important to recognize and overcome the common challenges associated withbusiness growth and expansion in order to successfully scale-up and keep-upwith the market. You need to ensure that the growth steps you take today willnot themselves create additional problems for the business in the future. Agood leadership management will help you make the most of

the opportunitiesthrough creating a sustainable level of growth for the future.

Thereare numerous challenges associated with scaling a business but we will be discussingthe key points under the following subheading:

Management challenges

Financial challenges

System/Process challenges

Manpower challenges

Sales Challenges

MANAGEMENT CHALLENGES

Most times, management and leadership structure isoverlooked during the scaling process Rememberthat scaling brings its own unexpected challenges and changes, and yourmanagement team alongside other departments have to be ready to adapt.

As the business scales up, the kind of management structurethat worked well when you were small will definitely not work this time but belaid aside for a more defined and structured leadership and management style.

When scaling up, it?`s crucial to look at your leadership and managementarrangement objectively ensuring that the team is fully aware of the potentialissues and feels supported during the scaling period because this will keepthem at alert for the new challengesthat will need urgent resolving which they mayspend most of their time brainstorming.

Having a structured management approach geared at creating and developinga strong management team and building a reliable business strategy. This helpsyou develop systems and structures that make it easier to handle in the

future

 

FINANCIAL CHALLENGES

As a businessgrows, financial constraint is one of the major challenges it faces because atthis point it has exhausted the funding potential of thefriends and family who put in the capital to get the business started. Thechallenges businesses encounter while scaling may range from inadequate budgetallocations to excessive salaries or overhead expenditure.

Scale-up affects business finances in waysthat is unexpected for example if more employees are needed, but the budget cannot accommodateadditional salaries, growth is limited/restrained .As the business grows, it will need to employ new staff, procure more facilities or raw materials, increase suppliesand develop new products and features, and all these require additional funds.

A good cash flowcontrol is very important for any scaling business because the key element inbusiness planning and assessing new opportunities is making the best use ofyour finances. The choice of asset based loans and invoicefinancing compared versus Venture Capital is about more than just theavailability of funds.

One of the most important things you can do to protect yourself if youare scaling is to plan ahead because it helps you anticipate your financingneeds and arrange suitable funding.

 

SYSTEM/PROCESS CHALLENGES

Anotherserious challenge of scaling is creating and maintaining the right systems thatwill meet your growth. At this point, responsibilities and tasks can bedelegated to subordinates, but without strong management information systemsyou cannot manage effectively.

Puttingthe right process in place is a vital part of helping your business to grow,and

by employing extra services and support, you can reduce the workload foryour employees, and allow them to focus their time accordingly. For this canease overall stress and ensure the growth stage runs as smoothly as possible.

Nevertheless,investing in the right systems is an investment that will pay off both shortand long term. You benefit every day from more effective and productive operations.

 

MANPOWER CHALLENGES

As the business grows and becomes more complex, you need to develop yourtime management skills and learn to focus on what's really important.

That?`s where hiring the right manpower comes in!

The abilities you need to take youre your business to another level isnot the one you will need to grow your business. Attracting and keeping the right people is veryvital in any business that has the potentials to grow bigger because hiring onewrong person can cost more than just lost salary, youll be facing loss ofrevenue as well as wasted recruitment and training time. If it is possible, getrid of the wrong people quickly and hire people who have scaled a businessbefore and rely on their expertise, but remember that a strong culture fit andcompetence is most important.

You can as well decide to consider using outsourcedor part time options initially or to train and develop your employees to ensurethey stay committed and productive to the company

 

SALES CHALLENGES

While business leaders might intuitively recognizethat many areas of the business change as the business scales, many fail to realize that this applies just as much

to the sales function. As a businessscales up, some executives usually fail to expand and scale their sales teamsaccordingly.

However, up-selling and cross-selling are still moreeffective techniques than selling new business opportunities as your businessgrows. And while it?`s important to maintain a balance of prospecting andrelationship management, also allocate time to check in with clients to ensuretheyre satisfied.

Selling today requires more resources and large quotasand that is why sales organizations must focus on building the selling skillsthat have the greatest business impact such as investing in maintaining andimproving your team?`s sales skills so as to stay in-tune with customer needsand be one step ahead of the competition.