Lessons I’ve learnt from scaling a business

28 November 2018

You’ve started a business, and it’s taking off. It’s a great feeling. Now, the next hurdle is quickly heading your way: scaling. Taking your business to the next level can be a challenge—but only if you’re not prepared for it.

We sat down with Vinay Iswar, Managing Director and Co-founder of NexGen to discuss a few of the highs, lows and lessons he’s learnt from taking NexGen Group from two brothers working after hours to start the business, to managing upwards of 10 staff. Vinay also gives us advice on how to avoid some of the obstacles he’s experience along the journey.

Focus on what you want to be - not what you are

Don't base decisions on where you are - base them on what you want to become. One of the first things I ask clients is what type of company they want to become - $1m a year turnover? $2m? You must have definite objectives. The decisions you make as a $100k-a-year business are different to one that turns over $10m. If you want to become a $10m business - start thinking like one.

You Need a Plan

“I want to scale my business” isn’t a plan. To scale successfully, you need a specific list of goals and tactics. Those goals should be reasonable and measurable (think SMART), and the tactics need to be customized to your business. Take time to lay out a plan that’s well-thought-out and well-researched. You’ll save a ton of time in the long run by breaking down big goals into smaller 90 day action points.

Resources Don’t Manage Themselves

While you’re planning your scaling tactics, make sure to keep your schedules, resources, and files organized. You’ll need to coordinate more employees, keep more projects and tasks aligned, and find a way to manage an ever-increasing amount of admin.

Invest in the tools to keep everything organized earlier rather than later. It’s a lot easier to establish superior organization practices before you grow. Investments like project management software, a marketing resource management system, and an effective customer relationship management (CRM) program go a long way.

Protect your business values

Things can change massively when your business is scaling, and many things will compete for your time and attention. Be prepared for that. Also realise the importance of safeguarding your business values - which must not be allowed to suffer. They've helped you to be successful up to that point. Don’t compromise the type of business you want to own just for growth. You’ll feel like you lost.

Work with an advisor

Creating a step-by-step game plan as to how you are going to scale your business is the first thing any entrepreneur should do. Going into it blindly will cause many errors, setbacks and could potentially lead you nowhere. Having an advisor can be as formal as an investor or someone in your industry that is happy to share advice over a cup of coffee. Niran and I catch up with a Business mentor monthly that hold us accountable to our goals and has given us the confidence to make a lot of business decisions.

Access outside expertise when required

Recruiting might not always be the answer. Often it can be better to outsource tasks and functions to ensure the best outcomes. Also realise when you need to delegate responsibility. Free up your time so you don't get caught up in day-to-day matters, when your time could be devoted to scaling your business. Stay focussed on the ‘big picture'. If you know what the scaled business looks like and who you need to achieve that it makes it so much easier to hire your first employee, second and third etc. Work with the likes of Sprout NZ who are more than recruiters, they get involved in growing the business and adapting people’s roles as the business grows.

Identify a Source for Funding

Scaling your business typically is not cheap. Determine if you’ll be hiring employees, increasing production, or investing in software. Yes, you’ll be able to pay for these things when you start bringing in more money. But most of that needs to happen before you scale, not after.

That means you need to bring in capital. Will you get a business loan? Pursue funding? Put up your own cash? Get an investor? Any of those will work. But you need to set your funding plan around what your end game will be once you’ve scaled so you know how to pay off any loans or give your investors a return for their money. E.g. borrow money to scale, then sell, repay loan and take home the profit.

Focus on Your Customers

If you’ve gotten to the point where you’re scaling your business, you’ve clearly made a habit of impressing your customers. Don’t lose sight of that. It’s easy to get too focused on your business when you’re scaling. Remember that, without exception, successful businesses are customer-focused. It’s not about your financial goals or your growth roadmap—it’s about how well you’re meeting the needs of your customers. Customer focus is what drives business success, and scaling is no exception.

Invest in Employees

Your employees drive your business. They’re the beginning and end of your scaling process.

Investing in great employees doesn’t just mean financially, there are many other ways to ensure your team are kept happy and engaged. At NexGen we run an active social club, have team lunches every Friday, pay towards education and put the health of employees above everything else. Happy staff, happy boss.

Scale Smart

Scaling your business is exciting—but don’t let that excitement get the better of you. Start with a solid plan and build from there. Be agile and ensure you giving the market what they want, not necessarily what you want. You’ll be glad you did.

What if it doesn’t work?

If it isn’t working, you need to fail fast, fix it fast and learn fast. If it doesn’t work, then something went wrong, or you weren’t agile enough when required. Did you have the right product? Did you have the right people? Did you run out of money? For example, you should cater a product-based business to a problem consumer are having, never build a product you think is wonderful and then throw money at it to try sell it fast. You will lose.  Great businesses fix consumers problems or make their lives easier, there isn’t much else to it!