What Significant Obstacle Did You Face When Scaling Your Business?
Small Biz Digest
What Significant Obstacle Did You Face When Scaling Your Business?
Scaling a small business presents unique challenges, which is why we've gathered insights from eleven CEOs and Founders who have successfully navigated this journey. From innovating to overcome market competition to streamlining client onboarding during expansion, these seasoned leaders share the significant obstacles they faced and the strategic solutions they employed.
- Innovate to Overcome Market Competition
- Maintain Culture in Global Expansion
- Delegate to Focus on Business Growth
- Scale Sustainably Without Compromising Values
- Attract Skilled Labor with Competitive Benefits
- Identify Effective Marketing Channels
- Implement Tiered Customer Support Systems
- Diversify Suppliers for Supply Chain Agility
- Proactively Manage Cash Flow for Growth
- Transition to Mentorship with Patience
- Streamline Client Onboarding During Expansion
Innovate to Overcome Market Competition
As a tech CEO, a major hurdle we faced during our growth phase was keeping pace with the increased competition. As we expanded, we had to jostle with bigger players in the market, which was intimidating. A wrong move could have led to a loss of our market share. To tackle this issue, we made a conscious decision to distinguish ourselves by focusing on innovation, specialized niches, and maintaining the quality of our products. Further, we focused on creating a strong brand and customer loyalty, instead of competing on price alone.
Maintain Culture in Global Expansion
One of the biggest obstacles we faced at our company when scaling was maintaining a unified company culture across a globally distributed team. As we grew, the challenge of keeping everyone aligned, engaged, and connected became more complex, especially with people working from different time zones and cultural backgrounds. The risk was that communication would become fragmented and that the tight-knit, collaborative culture we had built would start to fray. It was a real balancing act to keep everyone feeling like they were part of the same team, despite the geographic distance.
Delegate to Focus on Business Growth
Learning to accept that “staying busy” is the enemy of growing your business was a significant obstacle for me. I started working for myself in 2003 as a one-man operation. Today, my company does over $7 million a year in business and we employ 28 people.
But before we reached our current level of success, I really struggled with delegating plumbing and HVAC projects, so I wasn’t focusing my attention on the business and marketing side of things that would actually grow the brand and help us reach our revenue goals.
The first time I tried to scale my company, I hired a 5 person crew. But that didn’t work out because I kept thinking they can’t do the job as quickly or as efficiently as I could, so I would just end up doing it all myself. After that, I tried to scale again with just me and someone else, but ran into the same predicament.
Eventually I found a consultant who helped me really grow the business at a time when it was sink or swim. I needed to do this right, or else I would have to go and work for someone else. Once I grasped the concept that “You’re always chasing yourself 90 days from now,” we took off! If you aren’t doing what you’re supposed to today, you’ll feel the repercussions in 90 days.
For example, if you choose to put off taking or returning a small customer’s call because you’re too involved in a large project you’ve already secured, well that’s going to come back to hurt you in 90 days. Small business owners struggle early on because they want to do it all (large projects, remodels, etc.). But then they forget the small customer who is gone by the time they call them back. They lose out on that money when they “keep busy or are too busy.”
Once I was able to overcome the mentality that I always needed to be busy and involved in every aspect of the business, our brand started gaining recognition in the markets we were targeting and we began to see the consistent growth and revenue we needed to expand.
Scale Sustainably Without Compromising Values
The big challenge we faced was maintaining the integrity of our supply chain as we scaled, right as demand was starting to increase. It might have been tempting to compromise on our environmental principles to keep pace with the demand and grow our operations disproportionately. But we needed to scale up, yet not compromise our B Corp values.
We needed to drill down into our supply chain but find partners who could scale alongside us while aligning with our values of fairness and sustainability. We've spent a lot of time vetting, a lot of time talking, and, vitally, setting rigid guidelines for who can fulfill the performance and expectations of a B Corp—all while embracing the technical hurdles of going global. It's hard and it's expensive, but it works. By ensuring that our growth didn't wash out the rivers and clean living we champion, we're able to scale sustainably and bolster the reputation of our brand with consumers who are looking to buy ethically, and so create even more passionate customers who trust us to do right.
Attract Skilled Labor with Competitive Benefits
Attracting and retaining skilled labor proved to be a significant obstacle as my roofing and construction company scaled. In the early days, I could rely on a small, dedicated team of workers who were personally invested in the success of the business. However, as we took on more projects and expanded our service area, it became clear that we needed to grow our workforce substantially.
Finding workers with the right mix of skills, experience, and work ethic was a constant challenge. The construction industry is known for high turnover rates, and we certainly felt the impact of this as we tried to scale. We quickly realized that we needed to set ourselves apart as an employer of choice in order to attract and keep top talent.
To address this issue, we implemented a multi-faceted approach. First, we made sure our wages and benefits packages were competitive within the industry and our local market. We also focused on creating a positive, supportive work environment where our employees felt valued and had opportunities for growth. This included implementing an apprenticeship program to help train the next generation of skilled workers and provide a clear path for advancement within the company.
By investing in our people and showing them that they had a future with us, we were able to build a loyal, dedicated workforce that allowed us to scale our business successfully.
Identify Effective Marketing Channels
We struggled to find the right marketing channel while scaling our business. Before scaling, it was important to understand the marketing channels that worked for us—email marketing, social media, or PPC—as a correct approach helps you target your audience and build a strong relationship.
After analyzing the effectiveness of different marketing channels, we concluded that social media was the most appropriate method, particularly YouTube, to meet our business goals. Earlier, we had invested our time and money in email marketing, but due to its low ROI, it didn't work for us. The nature of our travel and lifestyle business requires a visual representation of our services. We understood the potential of YouTube, where we could post both short and long videos to showcase different travel destinations.
This social media strategy saved us time and money, and we reached our target audience effectively. Users enjoyed our YouTube videos, which drove traffic back to our website, where they purchased our travel services. From my experience, during the scaling phase of your business, you can diagnose the problem of marketing channels. Run proper metrics analysis and study the KPIs to find the perfect marketing channel to achieve your business objectives.
Implement Tiered Customer Support Systems
During a period of rapid growth at RecurPost, one unique challenge was managing the increased complexity of customer support without compromising personalized service. As our user base expanded, the volume of support requests grew significantly, and it became difficult to maintain the high level of individual attention we were known for.
To address this, we introduced a tiered support system with specialized teams focusing on different aspects of our service. Additionally, we implemented advanced CRM tools to streamline and prioritize support tickets effectively. This approach allowed us to provide timely and relevant assistance while maintaining the personal touch that our customers valued. By integrating these systems, we ensured that each customer received the support they needed while allowing our team to scale efficiently.
Diversify Suppliers for Supply Chain Agility
One significant obstacle I faced when scaling Kate Backdrops was managing our supply chain effectively. Initially, unpredictable supplier delays could set us back weeks, impacting our delivery times and customer satisfaction. To address this, I implemented a more robust supplier evaluation process and established collaborative relationships with multiple vendors. This strategy not only diversified our supply base but also secured our operations against disruptions. By maintaining open lines of communication and regularly reviewing our production timelines, we've become more agile and responsive to market demands. The result has been not only smoother operations but also an elevated trust from our customers, as we consistently deliver on our promises.
Proactively Manage Cash Flow for Growth
One of the most significant obstacles most of our small-business-owner clients face when scaling their business is managing cash flow. As the business grows, expenses increase (e.g., hiring new staff, expanding operations, purchasing inventory), and revenue growth may not keep pace immediately. This can hinder growth and lead to a scary liquidity crisis.
We recommend the following:
1. Improve financial planning: Develop a robust cash flow forecast that accounts for both the increase in operational costs and any potential delays in revenue. This helps in anticipating shortfalls and adjusting strategies accordingly.
2. Secure appropriate financing: Small businesses should explore financing options such as lines of credit, loans, or investors to ensure they have enough capital and expense coverage to manage growing demands.
3. Streamline operations: Focus on increasing operational efficiency and reducing unnecessary expenses. Automation, outsourcing, or optimizing processes can help balance the cash flow as the business scales.
4. Negotiate payment terms: Work with suppliers or customers to improve payment terms. Negotiating better terms can reduce the pressure on cash flow while still supporting growth.
5. Monitor Key Metrics: Track important financial and operational KPIs to ensure the business is scaling sustainably without overextending its resources. One of the most popular is the "Current Ratio," which is calculated as Current Assets / Current Liabilities.
By proactively managing cash flow, small business owners can scale their operations without falling into financial pitfalls.
Transition to Mentorship with Patience
Moving from operating a thriving brick-and-mortar salon for more than ten years to mentoring other salon owners in developing similarly eco-friendly, holistic, and long-term businesses was a major challenge for me as I expanded my business. Turning my focus from running my own salon—which I had spent years honing down to a science—to teaching others how to do the same was like launching an entirely new venture. Sharing my successes wasn't the only goal; I also wanted to lay out a plan that other salon owners could follow and use to revolutionize their own companies.
My salon was already successful, but turning it into a course-based business demanded a whole new set of abilities. The focus shifted from day-to-day operations and direct customer interaction to the development of an instructional program that other salon owners could use to achieve the same level of success that I had. I had to take a step back and reconsider my teaching, communication, and transformational approaches as a result of this process.
I had to remind myself to be gentle with myself throughout this whole thing. It was a lot like beginning again, even if it seemed like building on my previous work. It took some time to build a scalable course, promote it, and figure out how to help other salon owners make lasting changes to their businesses. I had to be patient and not expect this new facet of my business to take off immediately.
It seemed like I had to start all over more than once, learning how to construct something new from the bottom up. But I was able to go from being a salon owner to a mentor and instructor, assisting other salon owners in building successful, long-term companies, by keeping my eye on the prize and being patient with myself along the way.
Streamline Client Onboarding During Expansion
One significant obstacle I faced while scaling my SEO agency was managing client expectations during rapid growth. As we welcomed more clients onboard, keeping up with personalized service became quite challenging. I realized that if I didn't tackle this head-on, I risked disappointing clients who had trusted us with their businesses. To address this issue, I implemented a client onboarding process that clearly communicated what clients could expect from us at different stages of their projects.
I also started using project management tools like Trello to streamline workflows and keep everyone on track. By defining roles within the team and utilizing these tools for tracking progress, we ensured that no client felt neglected despite our growing roster.
