Before even realizing the idea of starting a business, an entrepreneur already needs to think about the opportunities for growth and development of their own business. Scaling is key to the viability and success of a company. As long as you stand still, competitors will use your inertia to grow and poach customers. But it’s important to realize that the growth process is invariably challenging, and its success depends heavily on teamwork and effective internal communications between employees and management.

What is scaling a business

Scaling a business is the expansion of a business in order to capture a larger market share and increase revenue. It should be realized that only long-term projects based not on constantly changing trends but on solving a problem are subject to development. A business based on “hype” is doomed to failure, as the hype subsides very quickly.

The optimal moment for scaling comes when demand begins to significantly exceed supply. Customers are demanding more and more of the product, which is not enough for everyone who wants it. The signal for scaling is a weekly increase in demand of more than 5%.  

Examples of scaling companies  

One of the most obvious examples of successful business scaling is McDonald’s. The fast-food restaurant chain, known worldwide, has become a key player in the market with more than 40,000 locations. McDonald’s developed and successfully implemented QSC&V – Quality, Service, Cleanliness and Value – to effectively scale the business.

Another example is Coca-Cola. The brand initially produced only a soda brand of the same name. Thanks to the application of vertical scaling and expansion of the assortment (Fanta, Schweppes, Sprite and others), as well as the development of a worldwide distribution network, the business managed to achieve impressive results. Today, the company has a presence in almost every country except North Korea and Cuba.

Facebook is currently the largest social platform in the world, not only through increasing the number of users, but also through the acquisition of other businesses such as WhatsApp and Instagram. In this way, the company has expanded its reach and influence in the market.

Amazon is also worth mentioning. Starting out as an online bookstore, the company has increased its range of products to such an extent that it now sells almost all product groups. Over the past decades, Amazon has become the largest marketplace with a turnover of 650 billion dollars in 2024.

These examples demonstrate that success can be achieved through the right formulation of development strategies and their effective implementation.

Scaling strategies

Before scaling a project, you should pay attention to establishing business processes in the company, where each team member takes his or her place and clearly performs all tasks. Optimization and scaling cannot happen at the same time. There are 4 key strategies that can be used separately or in combination:

• Innovation.
  This principle facilitates capturing the market at maximum speed, as seen in the examples of Tesla and Apple. The companies offered an innovative product with no competitors, which quickly gained popularity. It is important to keep in mind that such a strategy requires deep research, serious investments and many years of labor – an idea alone will not be successful. You should also realize that sooner or later there will be players with similar developments in your niche.
• Market pressure.
  Fake low prices, crediting, increasing the efficiency of the main processes at the enterprise – the main tools that allow you to get more profit without affecting the product concept and its production cycle.
• Scaling of independent units or capacities.
  This principle is used by enterprises and chain stores. The essence is as simple as possible: if one workplace generates 1 million in revenue, a tenfold increase in their number will generate 10 million. The strategy shows itself best in market segments with low competition.
• Mergers and acquisitions.
  This approach is effective for gaining strategic advantage, but it requires deep knowledge of finance and the industry. In addition, access to markets and the ability to acquire technology cheaply are important.

Plan for scaling the business

Scaling a company can be broken down into 3 key stages – each of which plays an important role in achieving success.

Stage 1: Developing the corporate culture

Being born at the stage of business idea maturation, corporate culture reflects the inner world of the founder of the enterprise. The owner of the company is the main bearer of values, he/she also communicates them to the team members. As the company grows and an HR-specialist appears, the maintenance of the corporate culture falls on him/her, but the business owner continues to be the inspirer of the whole project. Transmission of the right values allows to create a quality cohesive team, where everyone can count on the help and support of the team.

Thanks to a well-developed corporate culture, effective business growth is also realized. You also get a motivated team, for each of the participants of which the goals and mission of the company are important.

Step 2: Creating an organizational structure

The business owner should have 2 organizational structures in his arsenal – current and forecast. The strategy should be presented in the form of numerical calculations that describe the real expectations of the manager, not his dreams or visions of the future. Organizational structure should be thought about at the startup stage.

For example, if the goal of the strategy is to double revenue, and the conversion rate in sales is 10% at a certain throughput of one manager, it is necessary to increase the staff by certain times to achieve the desired result. The average check amount and daily revenue are taken into account. Efficiency, automation and optimization are also important considerations when scaling.

At the startup stage, it is common practice to hire cross-functional workers who are simultaneously responsible for several processes. As the business grows, the number of “hybrids” not focused on specific tasks should be minimized. As the staff grows, each employee should be assigned a separate area of responsibility, and departments should be formed for effective teamwork.

Organizational structure plays an important role at all stages of business development, but it should not remain static, improving and changing with the growth of the project.

Step 3: working with the team

Long-time employees can sometimes find it difficult to follow new rules and step out of their comfort zone. To avoid rejection from their side, management should communicate to the team plans for scaling and changes in processes that require systematization and improvement.

To have an effective dialog with the team, a plan should be laid out that outlines how goals will be achieved. Next, the strategy should be discussed locally with each employee, followed by a general meeting to communicate the global vision of scaling. All new processes should be described in detail, backing up the words with numbers and facts. As a result of the strategy session, each of the employees should realize that business expansion and improvement is impossible without these changes.

Risks of scaling the business

Scaling a business is always accompanied by certain costs – this applies primarily to time and resources. Therefore, it is worth taking into account in advance the problems that may arise in the process, as well as considering ways to solve them without harming the employees and the company.

Insufficient staff experience

At the startup stage, company owners often hire inexperienced people whose incompetence is offset by great enthusiasm. Despite their diligence and desire to achieve results, such employees may lack the knowledge and skills to perform their tasks at the required level.

The solution to the problem: drawing up an individual development plan for each employee, using external training, forming mixed teams of skilled and inexperienced employees.

Multifunctionality  

Multifunctional employees may have basic skills in a variety of areas, but lack the depth of knowledge in one particular area that they could be fully engaged in. Such team members may feel uncomfortable with narrow specialization, becoming, in their view, less useful to the business. However, experience shows that by focusing on one area, a worker is more useful than as a generalist.

Problem solving: doing the work in a pair of “experienced-small-experienced-experienced employee”, attracting external training, networking.

Rejection

In some cases, employees may consciously or unconsciously sabotage the scaling of the business. Sometimes such actions are explained by unfavorable labor market conditions.

Solution to the problem: If external conditions are really challenging, it is worth using short-term plans to scale. Focus on marketing, strategy, product improvement to gain a better position in the market. Employees should be explained the importance of scaling with concrete examples, describe the benefits that will accrue to the business and team members accordingly.

Scaling is essential for every company planning to stay in the market for longer than three years. In a rapidly changing market environment, it is necessary to adapt to new conditions without stopping to grow. Proper planning and a motivated skilled team will help build a solid foundation for the business to thrive.