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Posted by on Feb 28, 2016 in Startups | 0 comments

How to scale up your startup?

Scaling up is the key word these days in the startup arena. Everyone wants to start with something, look for funding and then scale up and make it big. Yes, business needs to grow! But, stats show that 8 out of 10 startups wind down within 1 year of starting out. This is not good news as what it conveys is an alarming fact that 8 out of 10 entrepreneurs either plunge into debt or lose their hard earned savings.

B-Schools, startup conferences, books etc teach you many concepts, but they are no match to practical exposure. I want to give you an example of how a business can be started and scaled up, from what I have observed from a road side buttermilk seller.

A year ago, this lady started her business with a pot, a stool and couple of cups. She was selling buttermilk in that earthern pot, all alone and on the road. I used to pass along that road everyday and used to see her selling buttermilk in a cheerful way. She continued selling buttermilk for the next 10 months and all of a sudden her one pot buttermilk startup has become big. Now, she has a glass display unit with at least 10 types of juices. What is even more interesting is that she has employed a person in her shop and there you go..a buttermilk pot turned into a variety juice bar!

Isn’t this entrepreneurship is all about? starting small, sustaining it for a while and then growing it up by employing people. If the basics are so simple, why do few people go crazy about it and make a complete mess with their startups. I want to provide you with two secrets that will help you to decide on how to launch and sustain your business first and then scale up.

  1. When you are starting a venture for the very first time, you don’t have any brand value. You are just throwing your dice in the already crowded marketplace that is dominated by lot of big players. In this context, you will do well if you start your business in a very small way without losing much investment in infrastructre, staffing etc. You need money to run your business for at least 6 months without expecting profits. If you run it for 6 months by providing quality service to your customers, then you will never fail. Don’t get too carried away by those big brands setting up one branch after another in a huge way. The can afford to do it because they have the needed capital and won’t need to convince people to come their way as they have already built up their brand presence.
  2. During the early days of your business, you need to learn each and everything related to it. There is no substitute to it and you should not expect an employee to do everything for you. You are the captain of your ship and it is in your very hands to steer it to safety before expanding out and employing people for management. Your presence during the initial days of starting up is the most vital cog for the success of your business.
  3. Once you have come to a point where your business generates money month on month and cannot satisfy your customer base with the present setup, you are forced to scale up. This is the real use case to scale up, customer should force you to expand and not the other way around wherein you establish something big and expect customers to reciprocate.

Have you ever seen road side vendors or small shop merchants fail in their business? It is very rare because they know the fundamentals of their business very well and they never learnt it in an organized way. It is all through experience. I was observing a gas welder go about his business from a hole in the wall setup, a very small place where raw materials were dumped inside and he was sitting on the steps with his welding kit. All the time, he is surrounded by customers waiting with their stuff to be welded. They know that this guy would provide a perfect service as he is highly skilled. This is what success in business is all about, customers coming to you for the value that you provide. No flashing boards, no big advertisements and no endorsements, it is all about customer satisfaction which comes from your knowledge of the trade and the attitude you possess!

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