Ryan Niddel is a CEO and board member specializing in enterprise value creation, believing that the ability to scale a business is what unlocks real value. Scalability, as defined by Investopedia, is crucial for a company to perform well under increasing workloads. McKinsey’s analysis of the “2Q 2019 PitchBook-NVCA Venture Monitor” showcases the importance of scaling, revealing that two-thirds of a company’s value is created when it scales up to penetrate a significant portion of the target market. However, many businesses mistakenly believe that more sales automatically mean it’s time to scale, missing the full picture.
After launching a business, securing funding, building a product, and establishing a brand, many entrepreneurs face challenges in scaling. To address this, there are six best practices recommended for scaling companies. First, investing in scalable systems and processes, such as establishing the Entrepreneurial Operating System (EOS) and utilizing financial and project management tools, is crucial for keeping operations organized. Building financial controls is also important, as understanding the cash conversion cycle becomes vital when scaling up.
Evaluating the customer experience is another key practice, as retaining existing customers is more cost-effective than acquiring new ones. Prioritizing a great customer experience across all areas of the business and soliciting regular feedback from customers is essential. Leveraging technology and automation can give a company a competitive edge while streamlining processes and enhancing data-driven decision-making. Building a winning team of motivated individuals who embrace growth and learning is crucial for propelling a company to new heights.
Consistency is highlighted as the true secret to success in scaling a business. Embracing change while maintaining a commitment to the mission and vision of the company is key. Scaling a business should be approached day by day, employing the best practices of investing in scalable systems, building financial controls, prioritizing the customer experience, leveraging technology, building a winning team, and remaining consistent with the vision. The journey of scaling a business is not an overnight process, but by following these best practices, business owners and leaders can take their companies to the next level.
