All businesses want to succeed and scaling up is part of that process. But it is not always that easy to turn a business from a small enterprise and into a large entity.
With high expectations from investors, staff and fellow founders, scaling up can be a tricky goal to achieve. Company leaders who are dedicated to growing a business must begin with an understanding of the company’s structure and addressable market to decide if they have both a scalable business and financial model.
Similarly, an evaluation of the goals that are in place for both development of the company’s products/services, staff and leadership should take place. Identifying if they have a realistic chance of success – and any risks should be a priority.
Once these processes have taken place, business owners should focus on the other potential barriers to scaling up- and if they can be overcome. With so many challenges out there, what are some of the specific barriers that business owners face when considering scaling up a company? Here are the Top 17 Barriers to Scaling that we’ve seen most frequently supporting small business over the last 13+ years:
- Speed to market vs. competitors: businessowners don’t want to miss out getting their product or service to market and being beaten by the competition. Consideration of how quick they can get their offering marketed and available to purchase is an important part of the success to scaling up.
- Intellectual Property: who owns what a business wants to sell, and is there a risk that others own the legal rights to an idea, name, product or a service?
- Lack of inventory: this was a particular challenge during the pandemic, where due to staff shortage and a lack of resource, items across all types of businesses were in short supply. There is nothing more dangerous than saying a product is available to purchase when it isn’t, with the risk of a business shrinking its customer base and reputation.
- Quality of prototype vs. mass production: the scale up of a prototype to a mass-produced product comes with a variety of risks, making it vital that any quality control issues are smoothed out ahead of an item scaled up for the larger market.
- Poor relationships with business partner/s: scaling up a business is a team effort, and if your fellow founders, co-workers, and investors aren’t on board then it is likely you will run into trouble. Everyone should be playing their part and have responsibility for a particular area of the scale-up plan. Without this, you run the risk of failure.
- Fragmented marketing tactics: a strategic and highly focused marketing plan should be at the heart of a scale up journey. Without this, a business won’t know who they are targeting, how they are targeting them and the platforms and spaces that they can be reached. This is one of the key advantages to utilizing The Marketing Maven Method from start to finish!
- Backorders and wait times: in a retail world where products can be bought and collected almost immediately, long wait times and confusion over backorders are viewed as unacceptable by customers. This can harm a company’s reputation and chances of scaling up.
- Defective initial product: products that don’t work? Say goodbye to be a trusted brand with chances of market domination.
- Problems with ecommerce journey for customers: with the majority of customers using the internet to purchase items and services, a company’s ecommerce offering needs to be easy to use and reliable. If a website has issues of navigation, purchase problems or simply takes a long time to load, customers will head elsewhere to fulfil their retail needs. This can be a major barrier on multiple fronts for a successful scale up.
- Miscommunication around product assembly: there is nothing more frustrating than a product that is difficult to assemble. Poor instructions or confusion as to where to seek help can lead to customers returning an item and looking elsewhere for a similar product.
- Poor customer service: treat your customers how you would wish to be treated yourself. Poor customer service will result in a decline in business and damage your chances of positive customer referrals as part of scale up success.
- Unreliable direct to consumer fulfilment: keeping a customer waiting for their product or service is a sure-fire way for them to head to the competition – and turn their backs on your business forever.
- Getting into retail too quickly: as part of any scale up risk assessment, it’s important for a business to consider if the ‘jump’ to retail is the right one. Ecommerce and physical buildings both come at a price- whether they can be afforded is a vital decision for a business to make.
- Pricing integrity: picking a price point also plays a critical role in the scale up process. Businesses should strategically consider what MSRP they need to be successful as well as by which channels, affiliates and international markets.
- Knock offs, improper set up on Amazon: be aware of fakes and frauds on the internet- scam products and retailers that sell them can cause businesses issues of trust and reputational damage in their bid to be bigger.
- Negative press: be prepared for negative press in the scale up journey that could damage your digital footprint and conversion rate. Working with established PR companies like Marketing Maven can help to reduce that risk and build up a positive portfolio of media coverage that will stand you in good stead.
- Outgrowing your initial staff: there is always a risk that a scale up leads to outgrowing the original staff base and can influence culture. Good scale up plans involve employees, asking for their ideas, feedback and creating a company culture that is inclusive and positive.
Businesses should consider these points as part of their scale-up journey – being prepared will lead to success!
To learn more about the strategies that Marketing Maven develops and implements for businesses to help them scale, contact info@marketingmaven.com.
To learn more about the strategies that Marketing Maven develops and implements for businesses to help them scale, contact info@marketingmaven.com.