How to scale your business and not burn out

I have never been interested in opening just one point. Business for me is first of all creation, development, increase. Recently I watched the cartoon "The Reef" with the kids and thought that scaling up a business is a lot like crossing a coral reef. When you have one or two projects, you can quickly fix any mistakes. But if there are many establishments, then you swim across the reef and find yourself in the open ocean. It will be good or bad for you there depends on what you did on the shore: do you have an engine (automated processes) or only oars (manual control), how the team works and so Further.

Main rules

Scaling is a marathon and requires preparation, from strategy and proven investment to the team. It is impossible to run 42 km the first time. It is also impossible to scale up a business without proper preparation.

On the other hand, speed is key. Very often, if you get too bogged down in calculations, you can waste time, and then the project will not fly.

The balance between these two factors is what makes the right scaling.

4 whales on which scaling is based

It is concept, strategy, team and finance. If everything is in order with them, then the design is stable, and scaling takes place without turbulence.

Concept

Not all projects are scalable. How crazy profit whether your oyster shop or antique lamp boutique, it is far from the fact that the project can be turned into a network.

Scalable projects have several characteristics in common:

1. Financial success. In the case of restaurants, a return of 20% or more is considered a good indicator.
2. Intelligibility. A fast food establishment or a Peruvian steak house, pop music or jazz - it makes sense to focus on the tastes of the majority, and not rare aesthetic preferences. The concept must be understandable to a wide audience so that it can scale successfully.
3. Repeatability. The design concept should be easy to replicate at each new point. So that there is no such thing that the stove has to be ordered in an Italian quarry and wait a year or look for a star tattoo artist for each salon.
4. Low average check. In the coming years, a strong drop in the purchasing power of the population is expected. Gasoline prices have increasedGasoline prices in Russia increased by 3% in 2019, Rambler reports. Further: https://finance.rambler.ru/realty/43400082/ and productsRosstat told which goods rose in price in 2019as well as VATThe VAT rate in Russia increased from 18 to 20 percent and tariffsUtilities tariffs in Russia in 2019 increased by 4.3% Housing and communal services. At the same time, salaries have not been indexed for several years. Therefore, now I would give preference to projects with a small check: if food, then fast food; if a store, then inexpensive goods.

Strategy

Before starting a race, you must know where and at what speed you will be moving. Determine how many points you want to open per year. More than 10 is called an aggressive strategy. It has a number of pros and cons. You can capture the best locations in the city, quickly popularize the brand. But at this pace, you rarely have time to follow the quality training of staff. Usually an aggressive strategy is chosen if the task is to capture the market or sell a concept profitably. Also in this case, it is critically important to have a well-known strong brand that can immediately generate a lot of traffic. visitors.

When you have decided on the number of points, evenly divide this number into a year and write down the timing. Let's say we open 10 a year. We will not open everything in the last month, so we plan to launch at least 2-3 projects per quarter. We calculate how long it will take to repair and prepare the premises. Let's say with restaurants it takes 4 months on average. Accordingly, in order to open an institution in April, we need to sign a lease in January. So plan out the whole year.

Team

Do not hire too many employees at once: it is economically unprofitable. But too few workers is also bad, as you can overheat yourself and tire the team.

It is necessary to clearly understand who you need and at what moment (at the stage of one project, two, five, ten). At the start you need:

• development manager (for finding premises);
• construction manager (if we build new objects, and do not buy ready-made ones);
• HR manager.

Marketing you can do it yourself if you have three or fewer projects. Operational tasks will be able to take over if up to six. Then you will need a territorial manager who will oversee the operational work of the entire network and direct the managers of each location.

The most common scaling story is quality loss. It happens that things go well only when the entrepreneur personally controls everything, and when new points are opened, everything breaks down. The cascade control system is important here, without it it is impossible to expand and not lose quality. It is not the waiter or the manicurist who made the mistake that is to blame, but the manager who hired and trained him.

Don't be afraid to give people a percentage of the profits. At one chain where I worked as general manager, restaurant directors received three times the market rate at the expense of interest. Imagine what a business benefit it is when employees are motivated overfulfill the plan.

Finance

Money in your account is the first and most important thing that you should have before it makes sense to start scaling. Do not under any circumstances expect that "now the profit will go and we will invest it." If there is no one hundred percent confidence in financial stability throughout the entire marathon, you shouldn't take it. This is the main rule.

It is also very important to make a pessimistic financial plan. And when you've done it, subtract another 10%. If this option still suits you, you can start. If not, then you better not. It often happens that out of 10 new establishments "shoots" only one, 5-6 more or less pay for themselves, and with the rest a complete failure.

It can take a long time before the whole system is on its feet and you start making a profit. You have to be financially and morally ready for this.