How to avoid scaling your business too quickly

5 January 2021

For a scale-up business trying to grow, it seems silly to think that you should air on the side of caution when it comes to the speed in which you scale. Surely you should want to be the biggest and best company in your sector as soon as possible. Right? 

 However, the truth is around two-thirds of the fastest-growing startups end up failing and perform worse in the long term than those that grow at a steady and sensible rate. Scaling too quickly is the downfall for so many businesses as they become out of their depth or cannot keep up with the pace. They also may hire the wrong people and make rash business decisions because their priority is growing at a rapid scale. Increasing your workforce doesn’t always guarantee business success; hiring more people can be incredibly costly in the long run, and having extra capacity doesn’t immediately mean that your business will grow. Instead, growing companies need to be strategic.

Sadly, it’s a common problem. After some small yet significant successes, tech businesses often believe they’ve found their place in the market and can get a little too big for their boots. While we’re all for promoting scaling up your business, you need to ensure you don’t scale too quickly and risk all of the hard work you’ve put in over the last few months or years. Before you scale, you must first validate your business model, have a clear vision of where you want to take your business and how you plan to get there.

Here are our tips on how to avoid scaling too quickly and instead, grow your business at a sensible scale that works for you.

Talent map

Talent mapping is a term that we use a lot, and for scaling businesses, we couldn’t recommend this service enough. With talent mapping, you consider the people within your business and their skills, as well as analysing your competitors’ organisations and their internal structures. You can also assess the talent available on the market. All of this information will give you a foundation for a well-informed recruitment strategy which is built on industry research and fact. It will help you to plan for future roles or skills that you may need to hire for based on industry-standard; identifying the types of people that would be most suited. For example, suppose you need to hire a full-time developer. In that case, you may be better off looking for a full stack developer, someone who works on both the back and frontend of a website, rather than hiring a specialist developer who is an expert in one particular area of web development.

Talent mapping means you can plan the majority of your hires strategically, and avoid getting overexcited and making unnecessary hires as you grow. Your business may perform at its optimum if you hire ten experienced senior developers, but the wheels aren’t ging to fall off if you only hire Nine. Or Eight even. Having a rough plan means you can avoid having unnecessary high recruitment costs and subsequent wages to pay in the months after.

You can also assess which of your existing team can be upskilled or retrained so that you can utilise their skills elsewhere, identifying the leaders of tomorrow and creating a plan for your business. Talent mapping also involves spotting any potential leavers within your business; you can use data analytics or even people-based research to do this. By identifying anyone that may potentially leave your business, you can plan for their departure and identify any individuals or specific roles that will be needed to continue business as usual without affecting your scaling efforts.

Don’t try to scale unnecessarily

If you intend to scale unnecessarily to be a bigger business, it may come back to bite you. Don’t look at scaling as an outcome which can be forced, consider it an extension of the work you’re already doing. Scaling as it’s needed means setting your company up for success but scaling before you’re ready, can put your company at risk. Remember scaling isn’t the end game, an effective business is.

A business should only scale when it’s ready; when there is enough demand, when you wish to expand your offering or when you feel confident enough in who you are and what you’re trying to achieve to take the next step. Scaling for scaling’s sake will end in disaster. Remember, slow and steady wins the race. If you try and make multiple hires for the sake of having a larger workforce, you may be able to struggle to keep up financially. People are expensive, so make sure you’re only hiring those that you truly need or that could have the potential to grow your business through their skills and ambitions.

Build an EVP

Building an EVP will help you to keep your employees across all aspects of your business engaged, motivated and on the same page. An EVP outlines what your workers can expect from you, but it also lays out the foundation of who you are as a business and allows your employees to form an emotional connection. Laying down an EVP before you scale means putting those values, goals and emotional factors of your business into writing so that your business can keep its core values as it scales. It means that even if you do see rapid success and have to scale quickly, you’ll be able to keep the fundamental elements of your business and the motivations of your team in line with your original business idea.

Also, building an EVP is the first step in attracting the right talent for you. Businesses that scale too quickly are often guilty of hiring the wrong people too, which can be a costly mistake. If people aren’t suitable for your business, don’t hold the same values or disagree with your culture and mission then you’re fighting a losing battle and will face the costly task of recruiting and refilling roles. Having a robust and clearly defined EVP means you’ll attract like-minded candidates who are likely to stay with you for the long-haul as you scale. They’ll adhere to your values and believe in what you’re trying to achieve as well as thrive in your company culture.

Find a strategic talent partner

Another way to avoid scaling too quickly is to find a strategic partner who can advise and help you to work at a pace that will suit your business and goals. While it may be tempting to want to do everything yourself as the leader of a growing business, you don’t have enough time, energy or expertise to do it all. Outsourcing your recruitment or any other aspect of your business to a strategic agency can help you to plan, grow and manage your own time.

Partnering with an RPO agency who will take the time to get to know the ins and outs of your business, from your goals, position in the market and leading competitors to your hiring objectives means you will benefit from a differing and expert perspective. Teams like the one at Talent Works, have years of experience working in specific industries like tech and therefore they know the expected rates of growth and how to attract the right number of people to facilitate it. They’ll help to implement a recruitment strategy based on your business objectives and will control any urges to hire everyone and anyone straight away. Instead, you’ll have a recruitment plan (which of course can be adjusted to meet your needs) to keep your hiring on track and ensure you’re making the right steps for your business.

If you’d like help scaling your business at a pace which matches your goals and successes, as well as advice on attracting the right talent to achieve this, our experts would be happy to have a conversation with you. We have teams that specialise in sourcing talent, digital attraction and creative recruitment marketing as well as building refined EVP frameworks and employer brands that stand out to even passive talent. We specialise in helping scaling tech businesses to grow and succeed in highly competitive spaces. Get in touch today to find out how we can help your business grow.

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