There can be a low-level panic that suffuses an organisation. A constant pressure to keep moving faster and faster and faster. It’s no secret that companies can grow too fast, stretching both culture and controls.
Imagine this: a multi-million-dollar company with almost 200 employees. The founder likes to micromanage to the point he (not the HR department) has sole approval over employee benefits such as requests for time off for holidays.
The company doesn’t have a dedicated IT employee or team. That’s because that same founder believes its gifted employees should be able to resolve any IT problems that occur! No matter if doing so pulls them away from developing products or resolving customer problems.
It might sound far-fetched, but these are just a few of the problems companies can face during an accelerated growth or scale-up stage.
Challenges of Scaling Up
While your scaling up might not experience the internal and external challenges above, you are likely to face at least one or two challenges. It might be:
- People challenges
- Sales and marketing challenges
- Operational challenges
- Administrative challenges
- Financial challenges.
As the CFO Centre’s founder Colin Mills said in his book, ‘Scale Up: How to Take Your Business To The Next Level Without Losing Control and Running out of Cash’, the scale-up stage is when businesses really struggle because they’re growing but don’t have the infrastructure to support their expanded operations.
They might have the necessary revenue, manufacturing base, or customer reach of a substantial business. However, their controls, processes, personnel, leadership and culture are often still that of the much smaller business they were a short time before, he said.
Worse, they often don’t have the resources to create and maintain such an infrastructure.
During the scale-up stage, they face running out of cash or simply getting stuck, he said.
Revising your business model
It’s only possible to avoid such problems by revising your entire business model. If you don’t, then all the small problems that niggle at you now are likely to become major issues once you begin scaling up.
Even if your business is already going through the scaling up stage, it’s still possible to retrofit, design, and redesign it, he said.
Don’t get lost in the complexity
“In many ways, like most things in life, scaling up is not rocket science. No genius is required, said Mills. It can often be about common sense. “But common sense isn’t always common practice, and being able to focus on the most important things as you scale up is a skill that can get lost in the complexity of the whole process.”
The easiest way to focus on what’s important during the scaling up stage is to have expert help with big business experience.
For a fraction of the cost of a full-time CFO, the CFO Centre will provide you with a highly experienced senior CFO. They will work with you on a part-time basis to help you with scaling up your business. To discover how the CFO Centre will help your company to scale up, please contact us here
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