By Arnon Shiboleth, Co-CEO, Prytek
Based on new statistics gathered in 2020, despite many success stories, the fact is that more than 90% of all new start-ups actually fail. 75% of venture-backed start-ups, which are supposed to be led by professionals, also eventually fail. In fact, less than 50% of all businesses make it to their fifth year. So why is this? For many, it is because of their inability to scale up effectively. In today’s increasingly competitive environment, it is crucial for business leaders to know how to successfully navigate company growth otherwise they will hit the glass ceiling called ‘scale”…
Here are my three top tips for ensuring a smooth transition when scaling up your business:
Evolve your infrastructure
Upscaling will amplify everything: the good, the bad and the ugly. It is not enough for businesses to fix things as they go along. You must perfect your product for its market in advance, and be prepared to respond quickly and effectively to any operational problems that become apparent in the transition. Infrastructure is definitely not just operations. When it comes to scaling up your business, infrastructure means things such as having the management with the right experience in place, the right brand, bank facilities in place and necessary cash flow resources.
Develop and invest in your leadership team
Your employees are your greatest asset. This makes it vital to onboard team members that share your passion for making your company a success. By investing your time and efforts into hiring people that have invaluable experience in the industry, you are also investing into your organisation’s future. As companies grow, CEOs have to start delegating and trust that those who will start making decisions on their behalf will be entirely capable of doing so.
You should also strike the right balance between innovators and accelerators in your company. You need an equal mix of creative employees that can bring original ideas and solutions, with employees that have the appropriate skill set – and a determined mindset – to put these ideas into action and make them a reality. Creating a culture of learning will also be pivotal in ensuring that those who start with the company can continue to grow alongside it.
Data is your new best friend
Intuition is important, but it isn’t everything. Data is a language that is less easily disputed when communicating with internal and external stakeholders. With this in mind, it is therefore very important to build systems that can not only automate as many tasks as possible – freeing up employee time to focus on client relationships – but that can provide clear data-driven insights.
For example, your data may show that there is an opportunity to expand into a new market. Launching into a new country requires a huge amount of planning with many needs to consider, including physical infrastructure, cultural fit and target audience. However, the role of data can be vital in showing both your employees and investors that this effort is justified, and more importantly, that it would be a profitable venture. On the other side of the coin, data insights can save you from pouring time and money into an area of your business that is less promising long-term. It may show that an expansion would not be a wise move – and it can point you in the right direction as to where your expansion investments should be concentrated.