I see many CEOs talking about ‘scaling’ when really, they are still in growth mode.
No harm in talking like that at a dinner party, I guess.
But if that social hubris continues into the boardroom, then you could be headed for trouble.
Because trying to scale before you’re ready almost always ends badly.
Many businesses think that they are ready to scale when demand exceeds supply.
A down and dirty test for whether you are ready to scale or not is when your ability to satisfy that demand-led growth is no longer hindered by either resources or structure.
In the ‘growth stage’, as revenue increases the functionality of the business is stressed, systems (if they exist) fail and costs can gobble up the anticipated increase in profits.
You’ll know if you are still in the growth phase. It hurts. And it can hurt a lot.
You’re ready to scale ONLY when your business strategy AND your financial strategy have fully matured and are aligned and the revenue growth can be accommodated easily and profitably.
In fact, if you unintentionally happen to end up in scaling mode then you need to ride that wave, before someone else jumps on it.
Because beyond scaling is the promised land of market domination and abundant profits.
And it’s that dominant player that keeps the competition in that painful growth phase.
But the reality is, it’s highly unlikely that you’ll ‘unintentionally’ find yourself ready to scale – unless you’ve figured out the next SaaS ‘big thing’ – because it’s almost impossible to get out of growth mode without intention.
Which means you must be INTENTIONALLY working on a scalable business strategy …
And INTENTIONALLY working on a scalable financial strategy …
Whilst still working through the painful growth stage.