In the last 20 years of running my own companies and advising others as a coach, I’ve come across the same issues that plague growing businesses and prevent them from successfully scaling up. As entrepreneurs, we make the mistake of letting these issues grow until they’ve crippled our companies.
Here are the top 5 mistakes I see impairing Scale Ups today.
1) Lack of communication
The number one mistake that I’ve seen affect companies is a breakdown in communication. Bigger teams mean much more to keep track of. The solution is a daily huddle – a quick stand-up meeting first thing in the morning to ensure everyone is clear of his or her goals for the day. Keep this 10-minute meeting time on everyone’s schedule, so that you know all employees will be available! It is important to see these meetings as a tool to make decisions and not as events.
2) Lack of cash
A common issue to affect so many Startup and Scale Up companies is simply not having enough cash. I know the pain of sleepless nights worrying about making payroll for the next month. To help with this, you should focus on get money from your customers, as soon as possible! How can your business get cash from customers? Use models such as a subscription or annual membership. You can also offer discounts for bulk orders or advance payment of a year’s fees.
3) Inability to let go and delegate
After you’ve spent so much time and resources growing your “baby”, it’s hard to let go of responsibilities and delegate work to other employees. As an entrepreneur, it’s easy to feel that you’re the best person for every job — but you can’t do it all. You need to hire the right people and you need to let them do their job.
4) Failure to hire the Right Talent
As you grow, you will need to hire a lot of new employees. But hiring the wrong employee is the ultimate way to waste cash and resources! The wrong hire at a managerial level can cost 15x the employee’s annual salary! Firing these employees is also extremely painful. For this, I highly recommend the Topgrading methodology for hiring. It’s a great way to filter through candidates and only hire the A Players who will drive the growth of your Scale Up.
5) The wrong strategy
The last issue, that can strike your company, is a weak strategy. If you find that your revenues are not growing as quickly as you’d like — or perhaps they’re growing, but your margins are shrinking, this is an indication that you’re in trouble and it’s time to rethink your strategy.
If you allow these mistakes to grow in your company, it will become very hard to Scale Up! Don’t let them take over, and keep on growing!