How to diagnose if you are fit for scaling
by Martin Ruckensteiner – innovation expert and Christine Spernbauer – Impact Hub Vienna Scaling Manager
Here is the second part of our scaling trilogy: “Scaling your social business”. In our first part we covered “What every entrepreneur needs to know about scaling”. This blog will give you four action points to help you diagnose if you are fit for scaling
After you found a solution to your challenge, you want to grow it. You prototyped successfully. In a test-and-trial environment you found out what´s working and whats not. Scaling is the next stage in the development of your venture. Actually, that´s the definition of scaling: Growing what is working. You know what´s working and now you grow it.
You leave the early stage of development of your venture and you enter into the scaling phase. Scaling means you hand over responsibility to other people: employees, customers, and potentially investors. Check, if you are ready and prepared to hand over this responsibility.
How do you know if you are ready for scaling?
We developed a “Scaling Diagnosis Test” which can tell you if your venture is fit for scaling:
- Is your venture ready to scale?
- Are you crystal clear about your scaling direction?
- Do you have the right organization in place to support the growth of your idea?
- Do you have the necessary funds to scale?
Let´s have a closer look into these four checkpoints:
Is your venture ready to scale?
One question which you might ask yourself is whether you are convinced that you address a significant social or environmental challenge and that you have found a convincing solution to this challenging problem. In the early stage pilots and experiments you have proven that you can create impact, which matters.
The other important aspect is money: Can you be sure that your venture will generate money? During or at the end of the scaling phase you should be able to re-finance your investments and cost. Have you found the formula to generate revenues, to lower your unit cost and to be able to keep overheads, fixed cost and investments where you want to have them?
Are you crystal clear about your scaling direction?
Now, where are you heading next? What is your growth plan? The clearer your growth target, the better. Imagine a tour to the peak of a high mountain. Ultimately, you want to arrive at the peak at 3,000 meters. Maybe it’s a good idea to break your tour into several stages. The first stage might be the ‘training and preparation camp’ – this is the early stage of your venture. The second stage might be the ‘walk to the base camp at 1,800 meters’. And then you need two more stages to the peak. – Be clear, what is your next scaling step? And where do you want to be after this step.
To illustrate this, here is an example from a social business in South America: X-runner. The venture provides sanitation solutions for slum communities.
Step 1: At the beginning, the venture worked with money from private “angels”.
Step 2: After the founders could demonstrate that some hundred users can be managed and that they pay for the service, they were able to raise money from prizes.
Step 3: More users, more revenue, and streamlined operations: The venture is able to attract funds from recognized foundations.
– Its important to realise every single step helps to prepare for the next one.
So, after you know your scaling target, you should double-check your scaling plan: Ensuring your target group and your offering are clear. Your marketing, sales and operational model are in place.
Do you have the right organization in place to support the growth of your idea?
Here is a tough question: Are you and your team self-empowered to scale your venture? Do you really want to do it? Scaling your venture will take several years. You will experience amazing moments of excitement and satisfaction. And from time to time you will be totally frustrated.
Yes, there are some successful lonesome entrepreneurs, but typically it´s teams who drive a company from small to big. Sure, most likely there is one leader of the team, but it’s still a team. Have you built your team and can you imagine spending lots of time with them. Do you enjoy their company?
Which skills and experiences are covered by your team? And in which areas do you need mentoring support: Opening doors to customers, hiring employees, building a company, raising money, strategy discussion or pure coaching? Who would be a perfect mentor? If you look behind the scenes of successful scalers, very often you find wise and influential mentors.
Do you have the necessary funds to scale?
Oh yes, money again. How can you fund your venture? How much money do you need? And when? And what is your plan to raise your funds?
If you want to do the test, you can contact us here: Then just ask a friend, colleague, mentor or coach to go through it together with you.
If all four lights are green, push the button! Its time to blast off into your scaling adventure!
What do you think? What are your scaling experiences? share with us what you have learned?
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Stay tuned for the next part next week.