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Is my company scalable? 8 points to consider

4-minute read

Every so often—okay, almost every week—companies that want help with scaling up approach me asking for cash. Looking at so many of these requests, it strikes me that many companies seem to forget that money is not the only solution to growth.

I understand. As an entrepreneur, you need to focus on many aspects of your business. I’m here to say that one of your top concerns should be your scalability.

This can be a scary word. You might not even fully understand what it means to be scalable. You wouldn’t be alone; many executives don’t know what it means.

Your scalability is your ability to maintain a good performance as your business grows. You want to be scalable because it means you have the ability to attract the right talent, the right investors, the right clients and, eventually, the right buyers for your business.

It will also make it easier for a banker like me to give you a business loan.

Here are eight points to consider when improving your scalability.

1. The weakest link: Surround yourself with the right people

I know you have heard this a million times, but it still holds true: You are only as strong as your weakest link.

You need to surround yourself with highly motivated and skilled teammates to succeed. These people will not only complement your weaknesses, but also build up your strengths.

When choosing your leadership team, make careful strategic choices to pick people who:

  • believe in the company and the product
  • are flexible and innovative
  • are humble enough to understand that no company is built on one person alone

Make sure you place the right resumes in the right roles. Your top programmer is not necessarily the right chief technology officer (CTO).

2. 20/20 vision: Focus on the right opportunities

3. Unmasked: Get everyone on the same page

Everyone in your company should be telling the same story to the world. But you also need to make sure this isn’t a mask that someone can peer behind and get a different view. Everyone has to believe in the story you are telling, and you need to act on what you say.

Company culture is important. It starts with the executive team and works its way throughout the organization.

If you need to, hire a consultant to help with the messaging. It will help you:

  • create your marketing messages
  • stick to your vision
  • attract the right type of customers
  • reduce employee turnover

4. Infrastructure: Are your systems and procedures scalable?

Can you use the current methodologies to move your company from $100,000 in revenue to $500,000? What about $50 million, $5 billion? Of course not.

But you should have a plan to build that next level of infrastructure without turning off the existing one. A plan the gives you the breathing room to develop the next level. A plan that clarifies the resources and people you need at each level of your development.

5. Leave: Make yourself irrelevant

The business needs to be able to operate without you there. Once you have created the company, you need to trust your team to operate without you. They need to be empowered to make decisions as well—this is the whole point of carefully choosing your executive team.

I advise my clients to take deliberate absences (two weeks at a time, not a few days) to help force your team to become independent and allow you to not be tied to the company.

6. Margins: The higher the better

Scalable companies have profit margins greater than 50%, they only require a few support staff and they are highly automated in their operations. Investors, venture capitalists and bankers love these companies.

7. Open the windows and doors: Keep ahead of new ideas

Your company needs to be open minded and continuously improving. Stay current, or use your 20/20 vision to lead your industry.

By ensuring that your company has a culture of constant forward movement, you will retain the best talents and stay ahead of your competition.

8. Listen: Pay attention to your investors and advisors

If an investor or advisor has concerns about your ability to scale, listen to them. Make sure they understand your business model, then listen as they share their worries.

Typically, investors are hoping you can fix the problem so they can give you money and/or resources to support you. Also keep in mind where the information is coming from: If these people have worked with many successful companies over the years, then there is probably a grain of truth in what they are saying.

Build a big company!

These are just a few points on scalability and only a starting point for the in-depth discussion you need to have with yourself, and potentially with your advisory board.

In the end, building a large scalable company is a massive undertaking—hence why not everyone is able to do it. But that shouldn’t be stopping you.

Think big.

Aim big.

Plan big.

You may just end up building your very own multibillion-dollar company.