Craig Malloy — October 19, 2017 — October 19, 2017
Lalmch / Pixabay
Up and to the right.
This is the vision CEOs go to sleep with at night. We pour our lives into our business, hoping that our efforts — and the efforts of our thoughtfully chosen and loyal teams — will put our business on a steady path to success. You probably think that if you survived starting a business, it should be smooth sailing from here on, but it isn’t. Unfortunately, scaling a business is not always an “up and to the right” journey. In fact, most of the time it’s far from it.
I won’t beat around the bush; scaling is hard. It challenges every system, process and person that you have in place, forcing you to act fast or fall behind. At Lifesize, we are intimately familiar with these pain points, having reinvented our business less than three years ago and now growing our customer base at a very rapid rate.
Looking back at our experience — and ahead at the challenges we face — we recognize four areas to consider when scaling a business.
Set the right goals
Scaling a business isn’t an exact science, but you should know why you want to grow and make sure your executive team and employees are on board with the vision. It may be challenging to pinpoint exact growth figures, so in the early stages it may make most sense to set operational goals first (i.e., creating a new go-to-market model). Once you have your operational boxes checked, then you can set specific goals regarding revenue growth, customer acquisitions or expansion of existing accounts.
Explore all growth strategies
Take a critical eye to new customer acquisitions. Attracting new customers is not just one department’s job — it’s a collective effort. Evaluate your marketing and sales strategies to see how you can better capture and address new potential customers’ needs. Additionally, look for opportunity within existing customer accounts. Are your customers’ businesses growing or are they seeing great value in your offering in every day usage? If so, there’s a good chance your solution or services can grow with them.
Another way to expand is geographically, but you need to make sure your infrastructure and resources are in place so you can service your customers in all areas. For young or small companies, this is a very big step. Hiring sales managers outside of your native country can be challenging. Cultural norms, language, labor laws are all different in every country you wish to enter. Additionally, regional or country specific laws regarding data privacy or regulatory approval (as in the case of hardware) can be challenging to navigate and expensive and time consuming to implement. That does not even include finding the proper way of marketing, distributing and brand building for your product and services appropriate for each market. Expanding geographically can substantially increase your available market, but be sure it does not dilute your resources more than the uplift in sales it provides.
Be creative
One of the biggest hindrances to growth is resistance to change and being “stuck” in your processes, particularly for a company like Lifesize only recently emerging from a total body makeover. Growth can happen quickly, and it’s important to be creative and resourceful to accommodate customer needs. At Lifesize, for example, we started a program to reach out to our tens of thousands of happy Lifesize customers we had acquired over the past decade that had not yet experienced our new cloud-based solution. We wanted to do this quickly, but we soon realized that our financial and order management systems weren’t set up to take orders the way we wanted and at the pace we wanted. So, we had to get creative.
For a period of time, we modified our quoting and order-taking process to operate outside of the normal flow in order to facilitate the new faster pace. There was some manual effort on our back-end, but customers appreciated the streamlined process and sales teams were seeing shorter deal cycles and higher close rates. It is a simple but important example of the need to think quickly on your feet and accommodate change.
Make sure your team can scale, but beware your expenses
One of the unsettling things about scaling a business is the unrelenting pressure to hire. When you think about addressing growth challenges, it’s easy to fall into the trap of thinking, “We just need more headcount.” Unfortunately, operational expenses can quickly get out of control. The truth is that it’s not about hiring more – it’s about hiring right. Scaling requires a unique skill set, so make sure your hires — especially at the management level — have the right experience and knowledge to take your company to the next level. Nothing kills the enthusiasm of a spurt of new-found growth than having to unexpectedly slash expenses (or headcount) because you got ahead of the revenue growth with a cost structure that you cannot afford.
At the end of the day, success in scaling will depend on finding the right balance between growth and expenses. This is a marathon, not a sprint — so keep yourself grounded while following your vision. I can confidently say from experience that there are plenty of mistakes to be made along the way, but there are also plenty of opportunities for creativity and innovation, and of course ways to surprise and delight your customers. Scaling a business will not take you only up and to the right in a straight line — it will take you on a much more exciting ride.
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