All entrepreneurs strive to achieve exponential growth in their startups. Companies like Uber, Snapchat and Oculus Rift grew their business from scratch to over one billion dollars in just two years or less.
But scaling a business up so fast can be incredibly stressful. This is not a problem that only unicorn startups like Uber face. Growing your business to five or six figures in revenue could also be equally demanding. Preparing your business infrastructure for scalability not only makes scaling-up possible, but could also help sustain this growth when it happens.
Here are a few tips to help entrepreneurs prepare their business for exponential growth.
Establish Contractor Relationships
In the early days of running a startup, you may be tempted to bootstrap everything yourself. Finding contractors to do your job is not only an expense you can do without, but could also be distracting since the time you spend training them for your job could be better spent executing these tasks yourself.
While not entirely wrong, this strategy can also be very myopic. A startup on a high growth trajectory faces incredible stress on resources. Hiring new employees to ease this stress can consume a lot of time. The pressure that your business faces during this growth period could be eased significantly by roping in contract workers.
It is worth pointing out that finding the right contractors for your job can also be highly resource-intensive. By going through the pains of hiring and training contractors during the pre-growth stage, you establish the back-end infrastructure that your business needs while scaling up.
This strategy is not without its share of concerns though. Is it prudent to spend money on external contractors when your business is bootstrapped? Although it sounds counter-intuitive, this strategy can indeed help your business succeed.
Take the example of Barbara Corcoran, the New York real estate queen who is famous for her appearance on the reality TV show, Shark Tank. Corcoran once revealed in her interview with NPR’s Guy Raz that she has personally signed only one real estate deal in her career. Almost the entire growth of her company was made through the incredible people she hired. By failing to outsource your job early, you may prevent your business from reaching the heights it is capable of.
Invest In Scalable Solutions
Exponential growth in a startup puts stress not only on your human resources, but also on your physical assets. Frequent server downtime or bandwidth that cannot accommodate the spike in demand could ruin the experience for your customers; and could also potentially threaten your survival.
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A good way to prevent this is by investing in scalable solutions. Cloud-based hosting solutions, for instance, are better than physical servers since their bandwidth can be increased with just a click of a button. Similarly, if you still have your mobile phone listed on the contact section of your website, you could replace it with a toll-free number or a virtual phone in general. In addition to making your business look more professional, this also makes sure that you could instantly scale your operators from one to hundreds without a lot of capital expenditure.
As a general rule of thumb, always make sure to invest in cloud-based services since it makes scaling up easy and efficient.
Knowledge Management
One of the biggest pain points during the hiring process is to train your new employees to perform at the same level of productivity as their better-experienced colleagues. This is easier said than done. For one, training employees takes time and this is a premium commodity in a company where employees are already over-worked. More importantly, studies show that inadequately trained workers tend to quit very soon. This is something you want to avoid in your startup.
Knowledge management is the process of documenting every aspect of your business in an online or offline module that could be used to onboard and train your new workers. The reason knowledge management is so important is because it does not typically take a lot of resources to build one. However, through a proper KM strategy, businesses can bring the time it takes to train their employees down significantly. Not only does it increase productivity among workers, it also contributes to better engagement and loyalty among workers.
Cross-Department Training
Many times, exponential growth in your startup does not necessarily strain all departments within your business. For instance, your sales team could slow their outreach down when you already have enough customers to service. Similarly, a spike in website traffic could strain your tech bandwidth. However, human resources or finance may not be impacted.
One of the easiest ways to handle resource crunch is through cross-department training. If workers from your sales or finance teams could chip in with operational support during times of high stress, this could give your business the much needed breathing space before you can hire contractors or workers.
In addition to preparing your business for growth, such a strategy also helps your team members gain better insights into other areas of your business like managing customers and support; traits that are necessary when they have to take up larger roles in your organization.
Have you experienced exponential growth in your startup? Share your experiences and lessons in the comments.