5 Dire DOs & Deadly Don’ts for Scaling Your Business

Written by Carol Coughlin. Posted in Operations Management

Scaling your business is simply the process of taking your company to its next level of success, but when you consider the definition of “scalability” this exciting venture suddenly becomes much more complicated – and real.


So, what is the definition of scalability?

Scalability means that an organization’s business model

has the potential for economic growth.

A $5M company has the business model in place to become a $50M company; a $50M company has the business model to grow to $500M.

And these are not just random numbers.

A company needs to have already achieved a significant success before its leadership team has even a fleeting thought of scaling.

Why? A 2011 report from StartUp Genome found that 70% of startups fail primarily because they scaled too soon.

Of course, almost every founder who launches a business venture begins with big growth in mind. For some, it can’t happen fast enough and they rush it, but for the other (smarter) 30%, well, they are among the rare few that foresee the perils of growing a company too fast.

Given all this, how do you know when it’s time to scale your business? How do you know when you have the business model for economic growth?

Most importantly, when you are ready to scale, how do you grow your company and increase its value wisely? How do you scale and also minimize your risk?

Adhere to my top 5 scaling DOs and DON’Ts for business owners and you won’t be leaving to chance what side of the 30/70 split your company ends up on:


5 Most Dire DOs for Scaling Your Company

  1. DO scale if your business is not only thriving, but is legitimately second stage. You need to have proof of your company’s marketplace value, because the last thing you want to do is struggle to grow an entity that’s not actually viable.


  1. DO understand what’s behind your company’s success. If you don’t have a clue about what makes your business valuable, it’s very difficult to replicate and build on that value.


  1. DO think big. If can’t imagine making that jump from $5M to $50M, it’s simply a sign that your perspective needs to shift. It takes a big player mindset to make the big player decisions that will make you and your company legitimate big players, too.


  1. DO surround yourself with greatness. Having mentors who’ve been where you are going and a leadership team that will help you achieve growth goals is more and more necessary at larger scales – when you can’t do everything yourself and you also can’t afford to leave decisions to the wrong people.


  1. DO make capital king. A company that’s scaling needs CAPITAL. You must ask and carefully consider:
    • Where will the capital my company needs come from?
    • What kind of capital is best for this company?
    • How will I evaluate financing options?


5 Most Deadly DON’Ts for Scaling Your Company

  1. DON’T isolate yourself. Beyond surrounding yourself with great mentors and a great team, you need to make great connections. Make developing new relationships, and even quick connections, a central part of your daily responsibilities because almost all opportunities arise from simple conversation.


  1. DON’T get stuck in the weeds. You’ve heard it again and again, but it’s true: one of the biggest mistakes a CEO can make is working in his or her business rather than on it. Get committed to the idea that the absolute most valuable use of YOUR time is making high-level strategic growth decisions.


  1. DON’T get stuck with nonessentials. Companies that spend money on business expenses they don’t really need to grow, but which can look like growth (such as expanding office space), are scaling prematurely and are more likely to fail. If you don’t need it to achieve growth, you don’t need it. When you do need to invest in essential growth-related expenses (such as an experienced financial strategist to help you sort through the capital-related decisions outlined in the DOs section) only go as far as you absolutely must. For example, you could hire a full-time CFO at that point, or you could work with an outside expert for a short time still get the exact same great result.


  1. DON’T get slow and sluggish. Scaling companies need to respond quickly to opportunities and swiftly overcome obstacles. Premature scaling will cost your company’s agility in a heartbeat – so stay lean and mean and ready to jump.


  1. DON’T forget why your company was ready to scale in the first place. Again, scalability means that your company’s business model has the potential for economic growth. If you loose sight of that business model – of what made your business successful before you scaled – you can end up with a company that’s “all over the place,” rather than one that’s focused and consistently moving forward.


If you find these DO’s and DON’Ts valuable, I have one final don’t:


Download our free resource Scale-Profit-Summit – 6 Steps for Increasing the Value of the Your Company. It will walk you through basic initial steps for increasing your organization’s scalability, as well as give you specifics about the financial and operational foundation you’ll need to create or improve. It also includes lists of the Key Performance Indicators (KPIs) that will likely be the most relevant measures of your company’s progress, as well as what to watch out for in your financial and operational functions.

I offer this resource as a thank you for subscribing to receive BottomLine’s articles by email. Remember that you can unsubscribe at anytime and we never share your information with anyone. If you have any problems downloading because you’re already a subscriber, email Apryle Krause at akrause@bottomline-growth.com and she’ll send you a copy.


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Carol Coughlin

Carol Coughlin founded BottomLine Growth Strategies, Inc., in 2006 as a way for small and medium-sized businesses to access the same high-level financial and operational expertise that gives large companies a distinct advantage. Using her own extensive corporate experience and willingness to sit in the hot seat as a catalyst, Carol helps BottomLine Growth clients climb to the summit of their success.
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