Scaling a business from zero to millions is not easy, but it can be done and my company Rentwise is the perfect example of this. Our core business is in helping companies implement a consistent and up-to-date IT infrastructure across the organization, under a rental or operating lease structure. By doing so, we help our customers conserve capital to invest in their core business. Thanks to key scaling strategies used by us we have managed to grow the company from zero customers to more than 300 and from 10 employees to more than 70 today – all in the short span of six years.
Attracting and retaining key employees is an important scaling strategy. As an entrepreneur or a CEO, there is only so much you know and only so much you can do. It is possible that you’ve exhausted all your ideas in the process of starting up and building up a company. This is where your team steps in, bringing with them a fresh perspective and new ideas. In an effort to attract and retain good talent, a conscious effort was made by us to share the company’s successes with employees and contribute to their personal growth. ESOS or a form of Employee Equity Participation played an important role in sharing successes with key people. Clearly defined goals and KPIs were also implemented to motivate them and keep them focused. Incentive based compensation or a bonus system that rewards hard working and loyal employees also goes a long way. It is important to remember that good people will want to be with a growing business that is rewarding them and unless you reward them, they can’t be blamed for following a better opportunity elsewhere. Retaining key people and allowing them to participate in their own personal growth plays a big part in growing a small business.
The next thing we did was identify adjacent products and services or adjacent markets. Since going into new segments would mean starting from a low base and going through a business start-up phase again, we chose to look into services and products which were connected to what we were already working on. By doing this we managed to leverage on our existing expertise and grow without incurring the costs that would go into supporting a new business. A thorough customer analysis plan was then set in motion and we spend a lot of visiting and talking to our customers to better understand them. We discovered that all our customers had one thing in common – a very diverse IT infrastructure that was the result of a traditional IT procurement practice based on restrictive budgets and the best IT deals available at the time of purchase. This legacy of inconsistent technology throughout the organization leads to issues of poor security, non-maximization of software and incompatibility problems. We also discovered that all customers aspired to achieve a standard IT operating environment which will help them overcome the problems of a diverse IT infrastructure. Having determined the problems faced by our customers and their desired solutions, we embarked on identifying the products and services we could offer them to satisfy their needs. Thanks to this exercise we also discovered a whole range of services that we could monetize through our existing customer base. For example, we offered our national and international customers asset tracking, something we were doing for ourselves, as a billable service. We also offered installation and de-installation as a chargeable service and also moved into data mining, among other things.
A golden rule in scaling is ‘Don’t scale unless you can differentiate’, and having identified our adjacencies, we went on to identify our differentiation factors. We discovered what we were good at and what we did better than our competitors and came up with eight additional services that our competitors did not offer in totality. This was then included in the entire Rentwise package, giving us a big edge in the market.
The next step is to ensure that the right systems and processes are in place. Documenting systems allow both internal and external people to know what to do. Most businesses scale by having replicable systems that everyone in the organization understands. Having replicable systems is made easier if a business understands the niche they serve since areas of commonalty or similar situations are more likely to be the same for a majority of your customers. Dominating your micro niche means ease of replicating systems which in turn allow your business to scale.
Organic growth or mergers and acquisitions are the next step in scaling. Both involve healthy risk taking appetite and reinvestment of money. Merging one business with another also involves the risk of transfer of equity, integration of systems and processes as well as co habilitation and cooperation of two cultures. These issues need to be worked out before you determine which the right path is, for your company as well as yourself since, as CEO, you are the key driver.
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