Most entrepreneurs, from the time they start their business, think about the prospect of scaling. Scaling is the necessary path you must take to improve your profitability, expand your reach, and solidify your long-term prospects — so no matter what your main motivation in becoming an entrepreneur is, scaling is highly appealing.
There are many things you’ll need to scale effectively, including sufficient capital, available resources, and of course, a long-term plan. However, there’s one golden rule that stands above all other criteria if you want to scale effectively: focus on quality over quantity.
Quality Over Quantity
What do I mean by that? As you scale, you’ll be making a number of investments, and when you do, you’ll need to prioritize making high-quality investments most likely to pay off, rather than diluting your money by spending indiscriminately. This may seem like common sense, but once you have investment capital in hand and a strong desire to grow, it’s tempting to invest money in low-quality applications.
Here are just a few examples of how to follow this rule:
· Don’t just hire, choose the right hires. Common advice says you should hire like your life depends on it, and that’s generally good advice, but the way it’s phrased can be misleading. Hiring should not be a race to fill up seats in your office to get more hands on deck; this can be advantageous if you need to hit a deadline and more hands can get you there faster, but for the most part, you’ll want to be judicious in who you hire. Taking an extra four weeks to hire someone for a key leadership position, like CTO, may delay your growth by four weeks (or longer), but in the long term, the better quality hire will be less likely to turn over, and can provide more substantial benefits to your company.
· Don’t market to everyone, choose an audience and hit them hard. When you’re ready to build buzz for your business, you’ll be tempted to market to everyone, shouting your business’s name from the rooftops and spending your ample advertising dollars indiscriminately. You’ll be tempted to attracted as many followers as possible, and get excited to build your web traffic as high as possible. However, it’s better to narrow your focus down to one target audience, and market to them specifically. Your sheer numbers will be lower, but your audience relevance and the quality of your interactions will be far higher.
· Invest in marketing channels that are most likely to pay off. There are dozens of marketing channels out there, and you’ll need at least a few of them to build recognition for your brand. However, if you focus on quantity by spreading your money across multiple channels, you won’t see nearly the impact that you’ll see by funneling that money to the most effective strategy. Thoroughly research your prospective marketing channels upfront, and experiment to determine the best place to put your investment dollars.
· Resist the temptation of shiny object syndrome. When you have some extra money in the bank, every new tool looks like a must-have, and every new potential strategy seems like a worthy bet. Constantly chasing after the next exciting thing is what I call “shiny object syndrome,” and it’s a good way to squander your budget. Consider the bottom-line impact of all your investments carefully, and reserve your funds for where they’re going to be most useful.
· Expand with purpose, not in a frenzy. When you start expanding, investing in new offices, warehouses, or even new online markets, do so deliberately, only investing your money where it will be most valuable. Though scaling sooner may give you more time to grow and make money, you have to remember that this isn’t a race. One high-quality new store location is better than three half-assed ones.
The main idea is to make the most of every dollar you spend, even when you have more dollars to throw around. If you focus too much on quantity, as many new investors are wont to do, your growth may be stifled. Do your research, invest carefully, and you’ll be able to stabilize with a profit much faster.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!