Scaling the business

Stage 3: Scaling the business

Ideas start small, growing over time with effort. At a certain stage — with the right business and a market that’s ready for it — it’s time to scale up. The limits of scaling can be almost unimaginable, if your market can support such growth.

Scaling a business into a bigger operation presents challenges in that it requires more funding, more staff, more facilities, and more factors you may not even have considered. Additionally, a larger operation means more competition to gain customers and earn revenue on a much larger scale. According to The Hill, there are 582 million entrepreneurs in the world – some of whom may be targeting the same markets. So consider what other companies in the same space are trying to do with their product or service, and establish a competitive advantage that separates your business from the rest.

The first step here should be doing deeper research into the market to ensure there’s space for the business to grow and enough customers to support the increase in operations. If the answer is no to either question, the revenue potential may not justify the growth, so ensure you do your due diligence.

Remember that even McDonald’s, the world’s largest restaurant chain by revenue, started small. The first McDonald’s was opened in 1940 in San Bernardino, California, where over time, they introduced their Speeded Service System featuring 15 cent hamburgers. The restaurant’s success led the owners to begin franchising their restaurant concept and now there are more than 36,000 outlets in 100 countries around the world.

Step 4: Reaching the top of the mountain

Reaching the top of the mountain is a mighty achievement, worthy of taking a breath and enjoying the success. Keep the celebration short because reaching the top means facing the prospect of going back down the other side. It’s a challenge to stay at the top by maintaining your market position or finding ways to gain market share.

The challenge in this stage is that companies reaching maximum saturation typically struggle to remain innovative. Fifteen years ago, Blockbuster was at the peak of the video rental mountain with 9,000 stores globally, but failed to continually innovate. Competition from the Netflix mail-order service, Redbox automated kiosks, and video on-demand services were among the major factors leading up to Blockbuster’s eventual demise and bankruptcy.

Entrepreneurs start the journey with vigor, passion, and excitement. After the entrepreneur journey takes its toll, many lose the passion and drive for progress, preferring to try and hold onto what they’ve achieved. Often, this results in a company that is almost indistinguishable from competitors, and is often overtaken by newer, more passionate competitors.

The goal at this stage is to keep that entrepreneurial spirit — the one the business is built upon — alive and well. That passion is what will propel the company’s future success.

Each stage of the entrepreneurial journey has its own unique challenges and solutions.