The Four Ps Of Scaling: An Overview

IMG_2329Growing a business is always a challenge. Even with great founders, outstanding products or services, encouraging profits and exceptional momentum, there is no guarantee that scaling that business will be a smooth process. Not only are there the logistical issues when it comes to things like opening new locations, training new staff and creating a consistent customer experience, but there are other, easily overlooked elements to consider as an operation expands.

On a personal level, scaling a business is also stressful. Operating a single-shop business is demanding enough, and it can easily take a huge toll on your personal life. Expanding your operation by even a single location can have an exponential impact on your family life, friendships. and your health. From your ability to sleep to the simple sanity of downtime, every part of your life will be affected.

Is there a way to scale your business without completely sacrificing your work/life balance? Yes. The key is being extremely thoughtful about the process, particularly in the early stages as you develop your scaling strategy. To help, I’ve created a simple structure I’m calling the “Four Ps of Scaling,” modeled loosely on the famous Four Ps of Marketing.

Those four Ps are: People, Process, Planning and Pace. In this post, I’m going to provide a simple overview of how these concepts relate to a larger scaling strategy.

1. People: If you don’t have the right people, you’re done. That’s as true for a small company as it is for one that is rapidly growing. Getting the right people into the right roles as you scale carries an extra challenge for founders of smaller companies, as you’re also finding people to take over processes that have been handled by a single, highly dedicated person: You.

As a founder, you might be managing three or four people’s normal workload. You might be doing the books, managing the office and doing customer follow-up, all while still making time to meet with clients. The bottleneck you are most likely to run into is that you aren’t scalable. To scale your operation, you need to be able to create partnerships and structures in place that allow the business to work just as well once the right people are in place doing the right jobs.

2. Process: Developing consistent practices across multiple locations is crucial for a company looking to scale. One highly efficient way of doing this is to break up some of the business processes into two broad categories: The field-based “store” functions, and the centralized “corporate” work.

Corporate functions are things like HR, procurement, product development and marketing. If it can be centralized, it should be. The store functions, on the other hand, are usually customer-facing elements of company that either can’t be done centrally, or those which are far more efficient to do on site. A simple example: It makes sense for a chain of oil-change shops to have a centralized payroll system, but it would never make sense to try to centralize the oil changes.

3. Planning: For many entrepreneurs, launching a successful company can often feel like “building an airplane in the air.” That can sometimes pay off for a plucky, young startup, but it’s incredibly risky for an established company looking to scale. Just think of the many, many examples of brands that expanded too rapidly, only to dissolve into bankruptcy a year or two later.

Successful scaling means knowing where you want to end up, and having a clear plan for how to get there. The better and more thought-out the plan, the better. This planning isn’t just limited you operations, either. Expanding your company culture and replicating your customer experience should also be a integral part of the planning process.

4. Pace: Once you have the right people in place, optimized processes, and a solid plan for scaling, it’s time to think about how ambitiously you want to grow your operation. Growing too quickly carries plenty of obvious risks. At the same time, scaling too slowly can also have disproportionately negative results, like hefty opportunity costs. Like Goldilocks, you’re looking for the pace that’s just right.

No matter what pace you settle on, it’s important that you make it a factor in you overall planning. Methodically opening a new location every year might be the right fit for some companies, while aggressively launching a new franchise on a monthly basis works better for others. Market factors, like a small window of opportunity, will also play a role in determining your optimal scaling pace.

Each of these four Ps deserve serious consideration as you scale. To learn more about them, check out the Four P’s of Scaling podcast series I created on this topic.