Every single business is different and every business owner is different and has a unique reason for being in business, along with different ultimate objectives.  There are however 3 essential ingredients that must be present in any business, in order to see it scale effectively.  

What’s your destination?

Some owners are in business to grow an enduring family business that will outlast them, while others are building to exit, and others still building for lifestyle.  Whatever your reason and your endpoint, you need to be crystal clear around this fundamental issue, and have a documented plan concerning this, including goals, objectives and timelines.  The more specific you can be about your destination and the nuances around that, the greater your chance of a successful scale up.  Often business owners don’t have a clear destination in mind, particularly if they have stumbled on success.  To help sharpen the focus on your destination using other trusted advisors can be very helpful.  Sometimes you’re just too close to the action and need a sounding board.

The lifecycle of business

I’ve been through a number of lifecycle iterations in business, not always strategically.  The very nature of this topic of ‘Scale’ depicts the non-linear transformation of an entity from one state to another.  There are at least 3 common cycles with sub-cycles inside of each these:

1. Start-up.  Often, they will start small, sometimes in a ‘test market’; hopefully are passionate about their product, service and niche; have a vision for ‘disruption’; often self-funded and grow organically

2. Grow beyond the Founder.  Sometimes the best advice an owner can follow is to fire himself.  This sounds rather ‘over the top’, but the key message here (whether fired or not) is that the owner becomes the limiting factor in the growth of the business.  Leadership guru John Maxwell refers to this as the ‘Law of the lid’.  The primary ingredient for growth at this stage of the business cycle is for the business to bring in outside advice.  There are many ways to do this including setting up a Board of Directors, adopting an Advisory Board, have the business owner and key leaders join a ‘Mastermind’ group, and using the services of an external Business Coach.  

3. Funding the scale.  We’ve heard a thousand times and preached it ourselves, that ‘cash is king’.  But if you’ve ever been without it, you know just how true this is.  How many incredible companies have you known, who have folded because they simply ran out of cash?  We usually have more resources at our disposal than we initially think – we need to get creative and think right outside our box.  Sometimes the best way to do this is to spend time with business owners from other industries or professions to challenge our thinking.  To continually bootstrap our business will guarantee failure in our attempt to scale our operation.  At this stage of the business it’s time to talk with your advisors regarding all options to fund significant growth.  Avoid the temptation of taking the easy route (whatever that may look like for you) and do the research, keeping in mind not to compromise your Vision and Mission.  There’s a lot at stake at this point in the business, so pay good money for the best advice.

In all of these steps there is a level of vulnerability required by the owner.  The arrogance of ‘self-made’, ‘I know it all’ attitude will not get you to scale.  Scale is definitely a team-sport and built on relationships with other gifted people and organisations.

Remember, there’s an oak tree inside of the acorn, and as Richard Branson says “A big business starts small”.

John Robertson

Principal Coach

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