Home Small Business 3 Small-Business Owners on How to Scale up a Company

3 Small-Business Owners on How to Scale up a Company

3 Small-Business Owners on How to Scale up a Company
  • There are many ways to grow a small business.
  • Owners must gauge their tolerance for risk, as well as the business’ impact on its users.
  • One CEO told Insider that leaders should first consider how much workload a company can take on.
  • This article is part of “Starting Up Your Small Business,” a series exploring steps small-business owners can take when starting out, transitioning, or scaling up.

“I think the media often portrays one narrative — those unicorn startups that get the big VC funding and that are growing at a crazy pace,” Marnie Rabinovitch Consky, the founder of the anti-chafe-shorts brand Thigh Society, told Insider. “That’s great, but that’s not a requirement for growth.”

But how can you ensure you’re growing at a healthy pace — without growing past what your business can support? How can you build your own “just right” playbook for growth?

Insider spoke with three small-business owners about how to strategize growth within your organization.

Consider your tolerance for risk

As a fairly risk-averse founder, Rabinovitch Consky always knew she wanted to find a gradual way to grow rather than raise money to scale as fast as possible. With her chief financial officer, she works backward to figure out her growth targets each year based on a combination of sales forecasting and how much cash she feels comfortable spending on inventory.

She appreciates thinking through the pros and cons of different scenarios and having someone who understands her appetite for risk but can stretch her a bit out of her comfort zone, she told Insider. Sometimes, this means taking out loans to place larger purchase orders for the upcoming season. Sometimes, it means limiting their inventory, which caps their growth but requires fewer up-front resources.

“It’s my goal to grow self-funded until we can’t. We’re conservative, but we know why we’re being conservative,” Rabinovitch Consky, whose 14-year-old company has already achieved over $16 million in gross revenue this year, said.

Consider the customer experience

As Sarah Adler was considering the right pace for growing her mental-health platform, Wave, she saw cautionary tales all around her — companies in her industry that crashed and burned after rapidly growing at the expense of the end user.

For Wave, outpacing what the company can take on could lead to negative health outcomes for its customers.

“At the end of the day, there are actual clients at the other end of our product who can be really harmed if we grow too fast. But if we grow too slowly, we have the potential of going out of business,” Adler told Insider.

That’s why, when considering growth opportunities, she said, she first asks herself how the change could affect the company’s users.

“It may look really good for top-line revenue, but if I can’t keep my end user happy in the long run, there’s no ROI in that,” Adler said, referring to return on investment.

To avoid losing out on big opportunities, she looks for smaller ways to keep the customer relationship going. For instance, when she knew an opportunity to provide Wave’s platform to a company with 30,000 employees would overload its capacity — harming the experience of the end users — she proposed a smaller pilot. This allowed the prospective client to see the impact her product could have, while allowing her team to understand what they needed to achieve operationally to roll it out to the entire company within 12 months.

Consider your business’ capacity

Monisha Bajaj, the founder of the business strategy and growth consultancy M Times V, often works with business owners who have been so focused on the marketing and sales side of scaling that they forget to make sure their operations can keep up with demand, she said.

“Like most optimistic and ambitious business owners I’ve worked with, when I used to try to gauge capacity intuitively, I’d overestimate supply and underestimate demand — leaving no space to breathe,” Bajaj said.

To avoid that, she now meticulously breaks down her workload before saying yes to new opportunities — and always ensures her business is operating at less than 100%.

“I consider myself comfortably full at 70% to 80% capacity,” Bajaj said. “This leaves room to not only react to new opportunities but to be responsive to any obstacles that might come up, team needs, or just human things like rest, sickness, or unexpected emergencies.”

Consider your vision for your business

Ultimately, the best pace to scale your small business should be rooted in your vision — what you want it to become and what you want the daily experience of running it to be like.

“It was always very clear what I was leaving on the table by not taking investment,” Rabinovitch Consky said. “I knew I could grow much quicker if I took a huge influx of cash, but for me, it wasn’t worth the cost of what that would look like in the day-to-day operations.”

Bajaj told Insider she liked to ask her clients: What do you see your business becoming? Then all other conversations about how to scale can be rooted in that vision rather than the more traditional notion of scaling fast.

“We don’t even realize how much we’ve internalized this single narrative — it can weigh on our brains and make us feel less adequate as founders,” Rabinovitch Consky said.

“You just have to remind yourself that there are many different ways to run a business,” she added. “There’s no wrong way, really, so do what works for you.”