Barriers to Scaling Your Business: Lack of Systems

Posted by Chuck Kocher
On April 20, 2015

Barriers-to-Scaling-Business-Lack-of-SystemsWe’re continuing to take a look at three of the biggest obstacles to scaling your business. Last week we talked about how undeveloped leadership can be an impediment to growing your business. This week, I’d like to take a look at how a lack of adequate systems and infrastructure can undermine your efforts to significant business growth.

One of the things that sets entrepreneurs apart from other business people is the fact that they tend to think “outside the box.” It’s how they come up with new ideas, products, and services that others haven’t thought of. That attitude and orientation is often at odds with well-established procedures and systems.

An entrepreneur can “tweak” his idea over and over until it works exactly the way he or she wants it to. It’s one reason that a prototype can be so outrageously expensive. And if an entrepreneur is dealing with an early adopter (or perhaps someone on the “bleeding edge”) that client may be willing to put up with delays and even high prices for the privilege to be the first to use a product (both because it can give him a competitive edge and because he likes being on the bleeding edge).

When you scale up, however, and try to take your product to a broader market, you no longer have that luxury. You need systems in place to ensure that you can deliver to a much larger audience. Price becomes and issue and so does time. Without the proper systems and infrastructure in place, it’s impossible to meet demand. It’s a significant move to go from creating a prototype to manufacturing the product.

Manufacturing, however, isn’t the only area in which your systems and infrastructure need to scale—or grow—with your company. When you increase from two or three employees to 10 or 15 employees, your need for space, telephony, computer systems, payroll, insurance—and a host of other things—increases as well. The amount of information you need to track and respond to increases dramatically as well. Tasks that you used to be able to take care of “on the backstroke” now require significant attention. If you don’t have the people, systems, and infrastructure in place to deal with those things, it can bring your company to its knees.

Significant growth even affects the way you relate to customers. When you’re small, you know all of your customers by name. You know what you’ve discussed with them and you can keep track of what you’ve done for them. You can’t do that when you have 100—or 1,000 clients. You need systems and an infrastructure that will enable you to manage the increased information you need to manage.

Growth is good, but it’s not simply a matter of making more stuff faster and getting it out to more people. As you plan to grow your business, make sure you have the systems and infrastructure in place to support that growth.