supply-chain-blog

Resources

How to Scale a Business (Without Sacrificing Customer Experience)

scale a business

Deciding how to scale a business can determine the longevity of a company. If done improperly, scaling can cause a company to close its doors. There are always risks associated with growth, but by following key steps and being armed with good research, risk can be kept at a minimum. If done properly, scaling can secure your company’s future. Following the steps below can help your business grow successfully.

Keep Operations Running Seamlessly

Growing companies are challenged with forecasting demand and supply needs of their market. Efficient order fulfillment, inventory management, and other operational demands have to grow with the business or you risk compromising customer service along the way.

A company can help avoid back-orders, out of stock items, and delayed shipments with intelligent predictive forecasting and new technology. Partnering with a qualified supply management partner can also help you scale more quickly with their refined and top-notch resources and know-how. Using a third party logistics partner allows the company to focus on other important issues when scaling, like developing new products and increasing qualified staff.

Get Help When You Need It

It is essential to know where you’re at risk as your business grows. Finding help from an outside source can make the difference between happy customers and customers who look elsewhere.

Forging a partnership with a company that shares similar values to you and has expertise in an area where you lack can make the difference between successful growth and failure. For many companies that offer goods that means partnering with a supply chain management company like FIDELITONE, but it could also mean getting help on the accounting, human resources, or marketing initiatives.

In any case, you don’t want to be just a client, be sure to find people that will become business partners to you. Taking on partner mentality means they are also invested in your growth. You want people on your team who will accomplish tasks that your company cannot while also maintaining your customers’ expectations.

Perfect Product/Market Fit

Being clear on who your customers are and if there is sustainable demand for your product is a key consideration when scaling. Identifying not just one time customers but long-term customers is the way to sustainability and long term success. It is vital to identify and target these potential customers to ensure the growth of your company.

Entrepreneur Gabriel Luna-Ostaseski says: “You need to focus on fewer customer segments and verticals when you first start to grow, optimize those. Replicate how you close deals with those before you go after others.” It is great advice and something that young companies struggle with. Read more on Luna-Ostaseski’s advice on scaling here.

Customers Always Come First

Committing to offering great customer service will keep your customers coming back time and again. This commitment can range from personal interaction to offering the best product and experience in your field.

Making customer service a priority is crucial to implement from the start of your business, and maintaining quality service will only prove to help your business as it grows. The best way to keep your customers happy is to be sure to fulfill and exceed the promises that your brand makes, whether explicit like white glove delivery service or implicit with your branding and style.

Hire the Right People

Taso Du Val, CEO, has said “your people determine your product”. Hiring the right staff, who understand and embrace your mission and culture is key to scaling while maintaining customer satisfaction.

Hiring can be difficult to get right even when you aren’t growing. The issues become much more complicated if the staff has historically been small. It can be uncharted territory, which is where risk factors can occur.

A great success story on finding new hires that fit into company culture is social media giant Facebook. New employees spend the first six weeks in a boot camp with fellow engineers, doing small projects and being immersed in the company culture. When they finish and head to the main floor, they are ready to become effective members of the team, with full knowledge of the company’s culture.

Don’t Scale Too Fast

In 2007, Starbucks CEO Howard Schultz worried about the “watering down of the Starbucks experience” as the company quickly grew to 13,000 stores. The “watering down” resulted in customers missing the Starbuck’s experience they originally enjoyed as customer service slipped. Subsequently customers began to frequent competitors who scaled slower and focused more on customer experience.

The feeling and experience that customers got from Starbucks was being lost in translation. If you scale too much, too fast your fans will make their way to the competitor.

Have a Clear Mission and Brand

If you have a clear mission and brand identity, what happened to Starbucks won’t happen to you. Having clear guidelines in place will ensure that employee are all on board with the mission of your company.

It can be tempting for an individual business owner to want to take charge of these types of matters; but try to avoid this pitfall. Have a clear mission statement and brand identity in writing. Be sure to develop this collaboratively with trusted colleagues and be sure to fully train your team. However, be careful, simply putting something down on paper doesn’t change a culture. It must be lead by example, taught by higher level managers and embraced by all employees.

Be Prepared for Change

Although most realize that scaling a company means change, many are not prepared for the reality of change. Practices that worked in the past may no longer be effective as the company grows and letting go of old ways can be challenging.

For example, take online giant eBay. In 2004, eBay acquired local Chinese online trading site EachNet, assuming eBay would dominate online trading in China soon after. But eBay’s efforts in China became focused on selling to the the technically savvy.

Meanwhile Chinese website Taobao stepped in, selling clothing and consumer based products, offering the less technical customer online shopping options. Instead of changing course and recognizing that Taobao was a threat, eBay continued business as usual, and was forced to shut down in China in 2006.

Recognizing the threat and changing course would have saved eBay’s business in China. When deciding how to scale a business, be prepared for challenges like these, and be flexible enough to react effectively.

Scaling a Business is Exciting and Tricky

There are many other factors that can be considered when deciding how to scale a business, and many warning stories as well. The list above offers a solid foundation of advice on how to move your business forward and grow, while keeping your customers happy at the same time.

Do you have tips on how to scale a business? Share with us!

Previous Article Inventory Forecasting Techniques That Drive Value
Next Article Warehouse Efficiency and Your Bottom Line