2 Simple Secrets You Need to Know Before Scaling Your Company

Everyone can recite the checklist for fast growth: Infrastructure, business model, capital, strategic plan. Check. Yet, there are two lesser-known, insidious barriers that entrepreneurs keep smashing into.
08/26/2016 12:40 pm ET Updated Aug 27, 2017

Everyone can recite the checklist for fast growth: Infrastructure, business model, capital, strategic plan. Check. Yet, there are two lesser-known, insidious barriers that entrepreneurs keep smashing into.

If you want to kill weeds in your yard, just spray any number of products whose active ingredient causes weeds to accelerate their growth beyond a sustainable level, and the weeds will grow themselves to death. Many companies have grown themselves to death, and the results are not nearly as appealing as a weed-free yard. Other companies have prepared for and adapted to fast growth, and even thrived while scaling.

According to Gavan Thorpe, President of Boostability, there are two areas that could have prevented his company from increasing sales from $20M to $40M over the last two years, while growing his staff to 475, adding several strategic partners, and becoming a global organization. "Looking back," explains Thorpe, "if we hadn't focused on these potential problems, there is no way we could have expanded as quickly as we did."

Okay, so what are the two factors?

1. Bottlenecks.
When sales are slow, any company can work around processes that don't flow as smoothly as they should. However, by continuing to live with inefficiencies just because you can, you create a monster that will rear its ugly head when growth kicks in. Thorpe's solution to this problem is straightforward. "Anticipate the bottlenecks before they can choke your business, not after they start causing grief. Then, simplify and/or eliminate all unnecessary steps."

It's easy to imagine increased volume becoming a challenge for Boostability. Creating websites, providing SEO services, and managing social media for its customers is already complex enough. Add the chaos and pressure of fast growth, and inefficient processes could create severe quality and timing troubles, or even shut the operation down completely.

2. People.
Bench strength is important to any sports team, and a company's organization chart is no different. "A bench is a group of people who are ready to be promoted to the next level. It's important that you get the timing right, though," notes Thorpe. "If you hire them too soon, when there's not enough work to go around, the company can start to feel sluggish. If you hire them too late, they will constantly be playing catch up." Many companies pay too little attention to succession planning, especially at the mid-management and supervisor levels. But this is where much of the promotion activity is needed in a fast-growth environment.

If your company is about to enter an expansion phase, by all means put in place the standard measures of a robust infrastructure, solid business model, adequate capital, and stellar strategic plan. At the same time, be sure to shore up your processes and people.

And if you have any weeds in your planter areas outside, use the weed killer that causes unsustainably fast growth--as a reminder of how not to grow your company.