Top 3 Priorities for a Scale Up Business. In Blackboard Fridays Episode 59, Jacob talks about Business Lifecycle. Need this implemented into your business? Talk to the international business advisor who can do exactly that – Contact Jacob, Learn More, or Subscribe for Updates.
In Australia, half of all new businesses fail to survive 3 years. They never make the breakthrough from Start Up (watch last week’s episode here) to Scale Up.
For those who do, new strategic priorities emerge. Watch this week’s episode to learn the Top 3 Priorities for a Scale Up Business.
And as a reminder…
Every business moves through the same lifecycle. EVERY. Business. Understand the business lifecycle, as it applies to your business and where every one of your clients is situated, is so fundamental an entrepreneurial skill that the lifecycle sits atop ‘The businessDEPOT Way’ and was the topic of #BlackboardFridays Episode 1 way back in 2016. https://jacobaldridge.com/business/the-most-colourful-business-strategy-in-the-world-and-a-blackboard-fridays-milestone/
We’re currently diving deeper into each of the four phases in the lifecycle: Start Up, Scale Up, Step Up, and Sell Up.
Wherever you are in your business, one of these will have immediate relevance. If your clients are also business owners or businesses, then watching each of these will help you better understand, service, and sell to your customers.
Who is Jacob Aldridge, Business Coach?
“The smart and quirky advisor who gets sh!t done in business.” Back independent since 2019.
Since April 2006, I’ve been an international business advisor providing bespoke solutions for privately-owned businesses with 12-96 employees.
At this stage you have proven your business model, but you’re struggling to turn aspirations into day-to-day reality. You are still responsible for all 28 areas of your business, but you don’t have the time or budget to hire 28 different experts.
You need 1 person you can trust who can show you how everything in your business is connected, and which areas to prioritise first.
In this episode of Blackboard Fridays, we’re continuing our walk through the business lifecycle. We’re focusing today on the scale-up phase of your business journey.
Now, every business, that’s in business long enough, moves through all four of these phases in the lifecycle: start up, scale up, step up, and sell up. However, they move at different paces and sometimes, they fail to clear the speed bumps, hurdles, and brick walls that show up.
The start up phase generally lasts between 18 months and 3 years. The scale-up phase can last as long as a decade, and it’s a good place to be. If your business is in the scale-up phase, if you are a growth or fast growth business, this is a great time to be in business.
You want to make sure you’re implementing these strategic priorities to help you get there. If you’re selling to clients who are in this phase, understand how they’re feeling. They’ve got more money, more profit, and more time than at any other phase in the journey.
They can be great customers because they’re not going to quibble over price. However, they can be difficult customers because they don’t necessarily feel that they need whatever it is that you have to sell.
While I work with a lot of clients who are in that that speed bump point between a start-up and scale-up, I personally don’t get a whole lot of clients in the scale-up phase who go, “Hey we’re growing really fast let’s talk to a business advisor.” Understanding where your ideal client sit on this journey can help you focus your marketing and sales efforts more profitably.
So, if you are a business in scaler what’s the journey that you’re going through? Well you remember we left you at the end of startup feeling confident? Unfortunately, confidence isn’t enough to get your business working.
You can be confident in your idea but that doesn’t mean that you’ve necessarily got the skills, the execution, the right market for it to work. But if you’ve successfully implemented the three startup priorities, the product market fit, the business model, and the sustainable sales, then the revenue is going to propel you in to scale up.
The first thing you’re going to notice is there that confidence gives way to relaxation. You are now generating regular revenue, profitable revenue on a consistent basis. All of that hard work that wheelspin of start-up is now in your rear view mirror. You’ve got traction and you’re getting the growth that you need.
Now, that relaxation, as I say, can last a long time but some people try and rush through it too fast, they think it’s going to last forever. It won’t last forever. The first trigger that you’ll have, and this on average is seven to ten years into business, is this feeling of relaxation starts to build and expand into one of euphoria, ecstasy, ot the sudden success and the achievement at the pinnacle of this, you’ve achieved everything that you set out to achieve in business.
Now that feels great I’m not going to deny you that sensation, I just want to point out that if you’ve achieved everything you want to achieve in business, there’s only one way you can go. And on an emotional level that’s exactly what happens to businesses when they move through that peak as they head into the downside of the scale up phase.
Remember the top and the bottom conversations here are around energy, profitability, not necessarily revenue, and sometimes businesses while profitability and energy is dropping, continue to grow on the top line they don’t even recognize what’s going on. The feeling I hear most is frustration, which can give away to stress, a real pressure on you as the business owner to keep the business growing, even though it’s it’s not giving you anything anymore.
So, what do you need to do as a business owner? If you’re selling into scale up businesses, what are some of the strategic priorities you need to speak to to help a business go through this phase of the business lifecycle?
Well, the first one is a profit formula. You’re starting to get growth and you’re starting to turn a business from one where you’ve got to push for every last thing into a freight train that runs under its own steam but the challenge is it can take over. Suddenly, your business can be running you.
Uncontrolled growth is generally a sign that profit is being left on the table. How clear are you about things like your fixed costs, your variable costs, your break-even point, your cash break-even point? Your accountant is your friend through the scale-up phase of the business lifecycle, getting you clear on making sure you’re profiting as much as you possibly can.
Two, you need a growth plan. You can’t just grow out of control. You need to have a plan for what you’re doing at each step along that way, all the way up to the euphoria at the top. This will help keep you grounded. It will also help you put in place the things to make sure that this inevitable dip is not as significant or impactful as it otherwise could be.
The third thing to really focus on, especially in the early phase of the scale-up cycle, is the team culture. This surprises some people who wonder why I don’t talk about building a culture and startup. You do build a culture in start-up but it’s built around you and it’s easy.
As the business scales, you need to focus on it. You need to think strategically about the culture, or it too will go out of control. You’ll walk into a business one day and realize that you’ve got an entire team of people you don’t actually like. The downside that frustration it isn’t actually inevitable.
Less than half the businesses that start in Australia actually make it to that point in the business lifecycle. If you have made it, there congratulations. In next week’s episode, we’re going to talk about what you can do to minimize the impact of that brick wall and help make sure that your business doesn’t fall over, just when its success is at its greatest point. I’ll see you next week.
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