Scaling Slip-Ups: 7 Mistakes When Scaling Your Business

All successful businesses eventually have to scale. This involves improving and expanding your business in order to take in more revenue. Scaling a business often isn’t easy – it means pouring more time, money and energy into your business. There are many mistakes you can also make while scaling that can make your business worse off. Below are some of the common slip-ups to avoid.

Borrowing too much money

You may need to take out a loan to fund your business expansion. However, you should be careful of borrowing too much – especially if you’re already paying off large debts. Too much money spent in monthly debt repayments could seriously harm your profits. Unless you’re able to hugely increase your income, aim to borrow as little as possible.

Scaling too early

Some new businesses are too eager to scale. Ideally, you shouldn’t think about scaling until you’re getting a lot of customers and making a sizable return. You don’t want to spend huge amounts of money scaling up when you’re only barely making a profit each month.

Overwhelming your team

Your team needs to be able to keep up with the added demand. If they are already struggling to keep on top of the workload, you could end up overwhelming your team by scaling up – leading to demotivated employees and burnout. Of course, your scaling up strategy could involve hiring extra employees to counter this, but you need to be certain you can afford to do this.

Failing to outsource

Doing everything in-house can take up more time and energy. Outsourcing tasks may cost more, but it can prevent you and your team having to do these tasks – preventing you from getting overwhelmed. Aim to outsource your most time-consuming and tedious non-core tasks. This could include tasks like accounting, social media marketing or phone answering.

Stretching resources too thin

You may need to increase a lot of your resources so that you’re not stretching them too thin. This includes not just manpower, but equipment and tools. For example, if you’re scaling up your delivery business, you may need to consider more vehicles.

Not scaling your tech

Your technology needs to be able to match the size of your business. If you’re going to be accepting a lot more individual payments per day, consider whether your current bank account can keep up with these transactions – a bulk payment solution may be required to accept these payments. Similarly, if your website is going to be getting a lot more traffic, make sure that your site is able to handle this amount of visitors. Other technology like phone lines could also be important to scale.

Abandoning your loyal customers

Don’t forget the customers that helped build up your business. Some businesses think that scaling up means pushing up prices and targeting a higher-class of customers. You can do this, but you should also try to appeal to your original customers – if you push prices up too much, you may lose them. With some service-based businesses, it might be better to make exceptions for original customers – keep them on the same rates, while charging newer customers more.