Why Scaling Your Startup Doesn't Need a Big Budget
05th, December 2018 - Guest blog
One of the most common objectives for those who’ve started a small company is to scale it. Scaling means increasing the operating capacity of a business so that it can handle more of a workload and, presumably, become more profitable. In the minds of most businesspeople, scaling a business involves significant investment of the capital and human resource necessary to sustainably grow the business without causing too much disruption in daily operations.
And so, it’s no surprise that most people think that scaling a startup is expensive. However, the reality is that there are ways to broaden the operating capacity of a startup without a huge price tag. And, this can actually be achieved while also lowering costs.
The keys to economically scaling a startup include something called ‘systems thinking’ along with another powerful concept: business process automation. In this article, we’re going to delve into how you can put the power of systems thinking to work for your startup, and we’re going to explain how to tap the full potential of business process automation.
What is Systems Thinking?
At its core, systems thinking is a specific method of developing business operations that are designed to work well within the company as well as externally. Another more technical definition of systems thinking looks like this:
“Systems thinking is a holistic approach to business analysis that focuses on the way that a system's constituent parts interrelate and how systems work over time and within the context of larger systems.”
Have your eyes glazed over yet? Stay with me, as this starts to make beautiful sense for scaling startups pretty quickly. You see, one of the biggest missteps of startups as they start to scale is not anticipating bottlenecks in productivity. With a systems approach, bottlenecks simply don’t exist, because there are measures put into place to prevent them.
Here’s a great example - let’s say you run a small company that manufactures a very specialized gizmo. And, let’s say that you’ve decided to begin scaling the business by developing newer and more technologically proficient products. To spearhead this effort, you might make the decision to pump a ton of money into research and development, incurring significant costs in order to arrive at a next-generation product that customers will fall all over themselves to purchase. Presuming your efforts are successful, you will likely find yourself with an entirely new problem: you’ve got a game-changing product to sell, and no sales people trained on how to sell it, no inventory management system to handle the orders, and no supply chain in place to actually deliver on production-level orders.
This is an all-too-common symptom of not taking a systems approach to scaling a business. A systems thinker would anticipate the demands on other aspects of the business before the R&D investments were even made, and resources would have been allocated on the front end so that the entire system would be able to operate smoothly.
Systems thinking is all about viewing every single business process as a component part of a larger system, and treating every mechanism within the business as having a measurable, qualifiable impact on every other mechanism. By doing this, scaling a business becomes much, much easier, and issues like productivity bottlenecks become a thing of the past. Fewer bottlenecks translates into lower overhead, making the scaling effort much smoother.
What is Business Process Automation (BPA)?
Business process automation is, simply put, the technology-enabled automation of complex business processes. What BPA sets out to do is to reduce as much human involvement as possible throughout the lifecycle of any given function within a company. Think of it as using technology to remove the liability and costs involved in relying on manual tasks or feedback to accomplish a business goal.
Let’s look at a simple example of business process automation in the real world: voicemail.
50 years ago, if you called someone over the phone and wanted to leave a message for them, there would have to be another human being on the other end of the phone who could take your message, write it down, and then deliver your message to the intended recipient. Imagine all of the things that can go wrong with this: the message might be misinterpreted, lost, or simply forgotten about by the person who took it.
Today, with the advent of fully automated voicemail systems, getting a message to someone using the phone is 100% automated, and requires no human involvement whatsoever.
Another example of business process automation is mail merging. This advancement in technology allows for customized messages to be sent to large groups of recipients through the use of ‘merged’ data fields that contain recipient-specific information. In this example, a computer program does the work that would otherwise need to be done by a human, thus saving money and reducing errors.
BPA Optimization for a Startup
It’s important to note that many automation business processes rely on disparate, often geographically separated stores of data to function correctly. This is especially the case with the use of Enterprise Resource Planning tools, or ERP’s. Because of the advanced sophistication of these tools, and because so much of BPA technology is built on the backbone of the internet, a reliable, affordable, high-speed internet connection is absolutely crucial.
In fact, it’s a foregone conclusion that the future of startup scaling will be heavily dependent on the throughput and uptime of modern data infrastructure.
To keep the costs of scaling your startup as low as possible, rely on systems thinking in conjunction with smart application of business process automation. By combining these two powerful concepts, you can supercharge the efficiency and scale into the future with predictable, reliable profitability at every turn.
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Kevin loves developing and implementing a strategic business plan for the different startups he has founded. He has become an expert on the different ways of growing a business and overcoming the hurdles Founders often face. His latest venture is Broadbandsearch.net, a website comparing home TV and broadband packages.