Top Business Scaling Mistakes First-Time Entrepreneurs Make

Top Business Scaling Mistakes First-Time Entrepreneurs Make

Growth is good. Growth means that a business has increased its revenue, as well as its other aspects (such as employees, office space, etc). The problem? It takes resources to sustain constant growth. Growth is only achieved when more resources are spent. The solution? It’s scaling, which allows for growth without necessarily investing additional resources.

However, scaling has many pitfalls, and we would do well not to fall therein. To learn more about business scalability, we talked to Shatay Trigère from scenarios.ME, a boutique management consultancy. They shared with us some of the most common mistakes businesses make in scaling their business.

We wrote earlier about the essential steps one must take in order to scale a business. In this article, we will turn our attention to things we must avoid in order to scale our businesses successfully. All of this was inspired by a fruitful exchange between the .ME team and scenarios.ME.

So, let’s start!

Read more: Essential Steps To Run And Scale A Successful Startup

Growth vs. Scaling (Why Scaling Is So Special)

Don’t get me wrong. Both growth and scaling have positive outcomes, and both can potentially bring proud smiles to entrepreneurs’ faces. Growing and scaling a business – an entrepreneur must know how to do both. 

Even so, there is a difference between growing and scaling a business. And really, it all comes down to resources and how they relate to revenue gains. Now let’s see what the difference between growth and scaling really is.   

Growth happens when additional resources increase revenue. Scaling happens when strategy and innovation in unison increase revenue without additional resources necessarily.

Starting with growth. Growth is linear. You add a resource (technology, employees etc.) and your revenue increases as a result. Better technology begets improved business processes, and more employees can work more, thus generating additional revenue. More resources spent = increased revenue.

Scaling is different. With scaling, you can generate more revenue with the resources you already have. You don’t necessarily need additional resources per se. All you need is strategy and innovation. Here, revenue increase is exponential rather than linear. The formula in this case is: Strategy + innovation = increased revenue.

In conclusion, growth happens when additional resources increase revenue. Scaling happens when strategy and innovation in unison increase revenue without additional resources necessarily.

Now the question is – how do you scale a business? And what are some scaling pitfalls you need to avoid?

On Business Scaling Mistakes – Our Exchange With Scenarios.ME 

Scaling a business is a complicated process. A process you can’t initiate without first elaborating a detailed, thorough plan. (Well, technically you can, but the metaphorical chorus of failed scaling ventures would admonish you to the contrary).  

And even if one did have a thorough plan, there’s plenty of chance the plan would fail to be followed to the T. 

So, we would all do well to learn how to scale a business. And avoiding any possible business scaling mistakes would be a beneficial plus.

For this, we had a brief exchange with the folks from scenarios.ME, a boutique management consultancy. We talked with scenarios.ME about business scaling. Which mistakes do businesses most commonly make when scaling? And what advice do they have for businesses in this digital world? Scenarios.ME were happy to answer these questions.

But let’s briefly introduce you to scenarios.ME first. Scenarios.ME is a boutique management consultancy. They work with businesses and brands to define or refine their reason for being, evolve and develop their offering, and scale their business. With expertise in everything from startup building to design thinking, Scenarios.ME helps businesses ideate and automate so they can innovate and impact the market even more. 

Owned and led by Shatay Trigère and backed by leading industry talent, Scenarios.ME aims to unleash the full potential of the clients they work with. Really, it’s a privilege to speak with them and to have such a team in the .ME family.

Now let’s see what we talked to scenarios.ME about, and what business scaling lessons they can teach all of us.

Business Scaling Mistake #1: Not Delegating, Not Letting Go

Delegating tasks sounds like the easiest thing in the world, right? Yet passing the baton requires more than merely a capable hand. Effectively, delegating also requires a lot of trust, communication, and cooperation with the people you work with. Especially for those of us who like to feel like we have everything under control.

It’s thus no wonder that Shatay highlighted not delegating and just not letting go of one’s tasks and responsibility as a common business scaling mistake. She says:

“Delegate so you can elevate.”

“Scale up means more distribution of power across different leaders and levels of leadership. If you don’t bring up new leaders and give them the power and responsibility you will find that you won’t have time to tackle the new growth areas that a scale up requires. Delegate so you can elevate.”

(Should you ever be in search of a motivational motto when scaling your business, ‘Delegate so you can elevate’ isn’t a terrible choice.)

Business Scaling Mistake #2: Not Specializing (Trying To Do Too Much)

Business growth doesn’t mean your products/services portfolio is more diverse. Rather, it often comes down to generating more revenue with the same product/service. Shatay weighs in on this by saying:

“Scale up doesn’t always mean offering more products and services. Sometimes, it’s offering a quality product or service to more customers and possibly enhancing that product and making it more robust. To do that, we must commit to staying focused on a few good things we are good at or want to improve at and not getting swayed by trends, ‘shoulds’, and fear of missing out.” 

The solution to this, though challenging in practice, is rather easy to put in words. We will let Shatay weigh in once more: 

“Do what you are good at, believe that it is enough, then test and verify that it is enough value for your customers. Then, a byproduct of scaling up is a possible loss of quality, so instead of trying to add new stuff, focus on keeping and enhancing the quality of your offering.”

Business Scaling Mistake #3: Not Upgrading Talent / Fear Of Ruining A Good Thing

Shatay laudably claims: 

“We love our people. We feel comfortable with them, and we don’t want to make them feel uncomfortable.” 

Their love for their employees is admirable. However, a business will hire new people eventually. Granted, this can potentially bring about some difficulties short-term. But in the long run, new blood, new ideas, and new minds will bring value to the team and make it feel fresh to work in. 

“Our current people need new leaders to learn from and gain inspiration with. Not bringing in new blood will not keep your current employees happy.” – Shatay Trigère, scenarios.ME

Or, to quote Shatay:

 “Scaling up means we need new sets of eyes on things, new more experienced people to come in and help using the expertise of having done a scale up before. And our current people need new leaders to learn from and gain inspiration with. Not bringing in new blood will not keep your current employees happy. If they aren’t up to the task they will feel burnt out and/or inadequate and leave soon anyway. Explain that you are bringing in talent that will help them become more valuable and help them reach their potential.”

Maintaining Focus In The Limitless Online World

Finally, we asked scenarios.ME whether they have any advice for today’s business leaders. More specifically, how can entrepreneurs thrive and adapt in the digital world? Shatay started by noting the plethora of available platforms and trends and how they can distract us. To wit:

“The array of platforms, solutions, and fads is dizzying. Stay true to your core mission and values and don’t try to be all things to all prospects/customers. Instead get really good at the things you have tried and are working on. Deep experience is rare and having that knowledge is valuable to your customers.” 

And no wonder. The digital world has a stupefying size and it’s easy to get lost in there. Long gone are the days when a business would be fully satisfied with only having a website and a Facebook page.

“The array of platforms, solutions, and fads is dizzying. Stay true to your core mission and values and don’t try to be all things to all prospects/customers.” – Shatay Trigère, scenarios.ME

The solution to this conundrum? Knowing the value of the things you do and create. Shatay continues:

“When it comes to initiatives, it can be good for you, your customers and your employees to have a structured test. Also, learn an operational plan that allows you to pick a new platform or solution to try and run it through a smaller scale, faster cycle test plan implemented by a smaller ‘innovation’ focused team. This team can bring back learnings. And once you have some data that validates the value, then you can scale it and gain expertise, thereby broadening your offering. This discipline will force you to choose your tests carefully and not lose focus on your core offering.”

Wrapping Up

When it comes to growing a business, scaling is preferable to simple linear, resource-based growth. However, people make mistakes. And scaling a business is no exception.

We had a brief exchange with scenarios.ME, a management consultancy, and asked them about the most common mistakes businesses make when scaling a business. 

In the exchange, scenarios.ME have highlighted the three most common mistakes: 

  1. Not delegating tasks
  2. Not specializing (trying to do too much)
  3. Not upgrading talent / fear of ruining a good thing

Have these pitfalls in mind, avoid them, and you’ll already be ahead of many first-time entrepreneurs.

We can only thank scenarios.ME for spending their time to talk with us. No doubt we’ll see you people rocking!

Author:

Slobodan Koljević

A digital marketer and a statistician. Wears blue all the time. Gets lost in current marketing discussions and centuries-old books with equal intensity. His favorite book was published in 1611.

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