Getting infrastructure right: How can startups build a scalable operational model?

Growth can be a mixed blessing for startups. It’s great to have new customers knocking at the door, but only if your cost base and cash flow are up to the task of serving them. Otherwise, growth could actually be your downfall.

It’s therefore important for startups to build a scalable business model – i.e. where revenue growth can outstrip growth in costs.

Scalability is partly a question of what products you sell. But it’s also about having a scalable operational model: your sales, IT and workplace arrangements must permit growth with minimal upfront costs and delays. And, preferably, not require you to work 24/7. At Regus we’ve seen hundreds of our SME customers scale up their businesses in Australia, and here are a few of the lessons we’ve learnt from them over the years.

Sales

Sales arrangements that rely on the contacts and skills of a key individual can only take you so far. Instead, you need to develop sales processes as well as talent. For example,

• Use CRM software to track sales activity and share information with colleagues.

• Make sure no information goes to waste. Social media, website analytics and sales data are invaluable for tracking interest and conversion rates, helping you target marketing activity more efficiently.

• Develop training materials to help new sales staff generate revenues more quickly.

• Think differently. For example, Australian software giant Atlassian used transparent pricing on its website – not something usually associated with enterprise software – to drive sales, rather than employing a large salesforce.

IT

The major difference between starting a business now and doing it a couple of decades ago is technology. Cloud applications, open source software and ready-made e-commerce templates have facilitated both starting up and scaling up.

There’s no need to invest in expensive software like CRM packages from day one – there are plenty of free or low-cost options available. But you do need to think about IT solutions from day one – don’t just launch a business and then try to patch on IT solutions afterwards.

Workplace

Traditional office arrangements and leases often lock small businesses into too-small premises and prevent them from expanding when they need to.

In contrast, flexible workplace arrangements provide scalability. They allow businesses to take on new space without upfront capital investment; they also allow them the flexibility to grow rapidly, or if growth falters, to contract.

In addition, the global network of a flexible workplace provider like Regus enables businesses to open virtual or physical offices wherever they see an opportunity for growth – without upfront investment or a fixed lease required.

HR

Finally, a scalable business must be able to hire exactly the talent it needs as soon as it needs it. But finding the right personality is just as important as finding the right skills. As small businesses rapidly grow, being able to maintain that company culture is essential to finding success. When Regus helped Google set up it’s first Portuguese office in one of our Lisbon centres, we sourced a foosball table and helped identify the right local providers to provide the renowned Google catering for their employees. In the US, Netflix allow employees to choose their own holidays, with no cap on how much leave people take.

These flexible HR practices, such as letting staff choose where they work can help attract the right talent for your organisation- while keeping them engaged.