Three Crucial Steps to Help Your Startup Scale in Zeros
An issue that every entrepreneur must address in a business is whether or not to scale.
Individuals who aspire to run a lifestyle business are happy to earn the same, steady income in one place from year to year. But that’s insufficient for the majority of us. Our goal is to expand.
The majority of American firms are unable to grow, which is the issue. In reality, just 9% of businesses made more than $1,000,000 in sales. They just run out of money. Under the wrong leaders, they fall apart. Or perhaps they never managed to gain the proper traction in the industry. Alternatively, they were ignorant of how to grow the company.
You hear the phrase “10x-ing your business” a lot on the internet, yet it has become meaningless due to overuse. Rather, I like to use the phrase “scale in zeros,” which means that if your income is $100K, you need to start considering how to go to $1 million. Consider what will lead you to 100 distributors if you’re currently working with 10. Consider what will get you into ten cities if you are in only one. This method of thinking will permeate every choice you make moving forward.
I’ve discovered a formula for replicating success after developing twelve businesses, and I go into great depth about it in my book Start. Scale. Exit. Repeat. I’ve learned that these concepts are “rules of the road” on the entrepreneurship highway rather than merely fortunate coincidences after talking about them with other serial entrepreneurs.
To begin with, though, here are the Three Crucial Lessons you must understand in order to climb:
Lesson 1: Scaling Is Different Than Starting
Not only does scaling a firm require a new way of thinking than at the beginning. It calls for an alternative approach. What matters most when starting a business is following your gut—your inner entrepreneur. More than anything else, your personality is what propels the company forward while you’re looking for seed investors or making product pitches.
However, scale requires a different mechanism. You must go over your business plan in its entirety:
It’s Time to Rewrite Your Story
It’s time to make some changes to your brand image, your long-term objectives, and your public persona. Talking to people at your door was the primary emphasis of door camera startup Ring in its early days. Their story changed to center on home security in order to scale.
Your People Must Adapt
Most likely, your scaling team won’t be your startup team. This doesn’t mean you have to fire everyone; rather, it means you need to hire more people who can scale in zeros. In the words of the late Jack Welch, “Hire people with runway.”
You Must Adjust Your Financial Situation
What sort of financing is required in order to add that zero? The myth that venture capital is the solution to every issue you face is untrue. 75 percent of startups that receive venture capital funding fail. In the meantime, venture capital funding was absent from 90% of the companies listed on the Inc. 500 list.
Think about all of your alternatives, including crowdfunding, Reg A, Reg D, and IPO filings. My best strategy, though, is to finance your company with money from your clients.
Your Systems Need to Change
Startups can run mean and lean, and often, your best practices are intuitive to the culture. But to scale, you might need to add quarterly strategic planning, sales playbooks, and even coaching.
Lesson 2: Scale Quickly, Kill Quickly
At Paw.com we’ve established a creed that is the essence of scaling:
- Test and Fail More
- Cut Losers Quickly
- Scale Winners Big
Many startups become risk-averse and continue doing the same old thing, which prevents them from scaling. Rather, they must do additional experiments to determine what functions well and poorly.
Too often, business owners fail to let go of losers quickly enough. since they invested a lot of cash and pride in the product’s introduction. They keep pouring money into it in an attempt to compel a failure to provide an unrealized profit. Reinvesting the money in a better seller and cutting the product is preferable. Give your successful product extra juice to make it even better when you find it!
Lesson 3: Discover Your X-Factor
The turning point in your story often occurs when you identify your X-factor, the feature of your company that sets you apart from the competition. Your Story’s primary focus during Start is the issue you resolve. You have to distinguish yourself if you want to rise. Your best-handgun, such to Domino’s Pizza’s “30 minutes or free” guarantee, or a product that reduces customer friction, like Warby Parker spectacles, may be it.
At Hostopia, it took us almost seven years to identify our X-Factor. But when we did, things started to go apart. We were able to grow outside of North America and establish ourselves as the industry leaders in email and web migrations and hosting. It will always be difficult for you to climb if you can’t make an impression on people.
If you can learn and apply just these three lessons, you’ll automatically increase your chances of scaling. But to learn more scaling ideas, like Distribution Channels, Perfecting the Pitch, and other Growth Hacks, grab a copy of Start. Scale. Exit. Repeat. or come join us on Startup.club.
