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Most business advice about scaling focuses on the obvious common-sense options we all expect, like hiring more people, getting more customers, or raising capital to fund such an expansion. While these things of course matter and they’re common sense for a reason, they’re not the whole story and they certainly aren’t the parts where most businesses get stuck when they’re trying to grow.
That’s because the real challenges of scaling can easily come from areas nobody talks about in business school or startup accelerators. For instance, how to you ensure you’re maintaining quality when you’re not personally overseeing every detail, figuring out which processes can be automated and which need human judgment, or dealing with the fact your company culture changes completely when you go from five employees to fifty?
These lesser-known requirements can absolutely define your scaling efforts, and moreover, they’re often the difference between businesses growing sustainably and ones falling apart under their own weight. Many entrepreneurs find themselves not afraid to make the big strategic decisions, but can flounder a little in the face of all the small operational details nobody warned them about.
So, in this post, we hope to help warn you about them. Let’s get started:
Your Personal Capacity For Decision-Making Will Struggle
As your business grows, the number of decisions requiring your input multiplies, sometimes exponentially to account for everything, and this becomes a serious problem if you’re used to being involved at every second. Small businesses can run on the owner making most choices, but once you have multiple departments and dozens of employees, this approach stops working entirely.
For example, if you currently approve every social media post, review every customer service response, and sign off on all purchases over fifty dollars, you’ll quickly find yourself working eighteen-hour days just to keep up with approval requests. Your team will then start waiting around for your input on routine decisions, which slows everything down and frustrates people who could handle these choices themselves.
The solution should be to delegate and teach other people how to make decisions the way you would, which means documenting your thought process and giving clear guidelines about when they need to check with you versus when they can proceed on their own. This feels uncomfortable at first because you’re giving up control, but it’s necessary if you want to scale beyond what you can personally manage.
Cash Flow Will Be Much More Complex & Unpredictable
Generally, for a small small business, cash flow is usually pretty simple, because you have fewer moving parts and can see most of your income and expenses coming from a mile away. Scaling changes this completely because you suddenly have multiple revenue streams, bigger expenses, longer payment cycles, and more variables affecting when money comes in versus when it goes out. You may have ten clients you’re waiting to pay, for instance, and as they might do at different times over the next couple months, that cash flow might not be so reliable.
For instance, if you land a big contract that brings in ten times your usual monthly revenue, but the client pays by alternative terms, you could need to hire additional staff and buy equipment upfront to fulfil the work. Then, you’re in a situation where you’re growing fast but running out of cash because your expenses have increased immediately, while your income is delayed by two months.
Many growing businesses underestimate how much working capital they’ll need during expansion, which means they don’t plan for the gaps between when they spend money to grow and when revenue comes in. That may require looking to budgeting for this approach, having another funding round or using lines of your credit.
Your Systems & Processes Will Break At Awkward Times
If you have informal systems, they may not be optimal but could work fine when you have a small team. Of course, if you scale quickly, those could become completely inadequate once you reach a certain size, and they usually break down at the worst possible moments. An example could include a simple spreadsheet you use to track inventory, which might have worked fine until you had multiple locations and nobody knows what’s in stock where.
To use another example, maybe you’ve been managing customer service through a shared email inbox that works fine with three people, but when you have eight customer service reps all trying to respond to messages, you may see customers begin receiving duplicate responses or their issues fall through the cracks entirely. These problems seem to surface right when you’re busiest or dealing with other growth issues too.
While you’re undergoing these growing pains, performing audits of you system is worthwhile. We’d recommend using outsourced help, like the enterprise SEO agency, who can keep your appropriate plans going (in this case for your marketing ranking), as you begin structuring your scaled approach.
Cultures Change As You Scale
The family team atmosphere small businesses often enjoy doesn’t necessarily or automatically scale with the business, because you can’t really force culture, which means many owners are surprised by how different the workplace feels once they have twenty or thirty employees instead of five or six. It’s often the case that your communication becomes more formal, perhaps office politics start developing, and you can’t just call everyone into a room to discuss changes anymore.
For example, when you had six employees, everyone knew what everyone else was working on and could help each other out during busy periods. With thirty employees spread across different departments, people start focusing on their specific roles and might not even know what other teams are doing, which can hurt collaboration and problem-solving unless you put those collaborative sessions, communication systems, and briefings in place.
As for your own personal input, remember that managing larger teams requires different skills than managing small ones, and many business owners find themselves needing to learn about things like organizational structure, formal communication processes, and performance management systems to keep up with it, which can feel a lot different. Moreover, any informal feedback and recognition approaches would work great in small teams, but don’t scale effectively, so you need more structured approaches to keep people motivated.
With this advice, we hope you can see just how to scale your business with expansion.
