Thoughts on scaling your startup

Oh, the guilty pleasure of takeaway food. From mobile kebab vans outside concert venues, to Peruvian street food stalls In Manchester – my current favourites include savoury items like Papa Rellena (stuffed potatoes), Tamales (corn dough with meat and spices in banana leaves) and Causa, a layered dish made from mashed potatoes, filled with chicken, avocado, and mayonnaise. Oh, and fish and chips.

Tucking into the classic combo of expertly battered fish and golden chips with a crunch and fluffy interior is a thing of joy. And with the endless ways to adorn it with salt, curry sauce, gravy, mushy peas, tartare sauce, it takes some beating. But latterly I have a new favourite – The Meatball Marinara has become, frankly, an addiction, and is just one of thirty headline sandwiches available from Subway.

A recent prolonged stay in hospital required me to take regular exercise and physio, and passing the Subway outlet inside the hospital was too much of a temptation. Not the healthiest option maybe, but also surprisingly low on fat, sugar and salt content, it was my reward after a personal rehab session.

Subway's story begins with a 17-year-old's founder dream and a $1,000 loan. In 1965, Fred DeLuca needed money  to pay his college tuition. He approached Peter Buck, a family friend, for advice. Buck suggested opening a submarine sandwich shop and provided $1k funding to kick start the venture. The concept ultimately changed the landscape of the food-takeaway sector and is a good example of ‘startup to scale up’ before the noise of tech unicorns and the excessive egos of the tech ecosystem came to exist.

The partners opened their first ‘Pete's Super Submarines’ ‘restaurant in Bridgeport, Connecticut, in August 1965, where they served freshly made, customisable and affordable sandwiches. The first day was promising. They sold 312 sandwiches. But success was fleeting. Within months, they were on the brink of closure. With only $6 cash remaining, they made a bold move: opening a second store. This decision would shape Subway's future. 

Within ten years, they had a chain of sixteen shops but to take the brand even further and reach their thirty-two-restaurant target, they decided to launch a franchised business model that took the venture into a period of incredible growth and popularity.

The company's innovation lay in customisation. Customers could watch their sandwiches being freshly made and choose their unique bespoke sandwich ingredients. This transparency and personalisation set them apart in the fast-food landscape where limited menus were dominated by burgers and pizzas.

Subway faced its share of challenges in its formative years; competition was fierce. They had to differentiate in terms of product and target market, so they focused on health-conscious consumers, marketing their sandwiches as a fresher, healthier alternative to burgers and fries. 

By 2002, Subway had become the largest restaurant chain in the US by number of locations, surpassing McDonald's. The company expanded globally. But this rapid expansion led to new challenges, and by 2014, sales began to decline.

The company had grown too big, too quickly. Stores were competing with each other geographically.  A marketing campaign fronted by a well-known personality was beset by scandal. To overcome these setbacks, they focused on innovation and modernisation. They introduced digital ordering, revamped store designs, and expanded their menu. These efforts paid off. In the first quarter of 2023, Subway reported its ninth consecutive quarter of positive sales growth. Global same-store sales increased by 12.1%. 

Today, Subway operates over 37,000 restaurants in more than 100 countries. The company remains committed to its founding principles: Never stop evolving to improve the Subway brand.

Subway's journey from a single store to a global brand illustrates the power of perseverance and adaptability. It's a testament to how a simple idea, executed well and continuously refined, can revolutionise an industry. So what were the key strategies  the founders pursued to scale up their business model that are relevant to nascent ventures today?

1. Define and hold your long-term vision and goals Vision is more than a set of words crafted into a grandiose statement. It has to be ambitious but grounded in clarity and purpose. My three standout Vision statements are:

• IKEA: To create a better everyday life for the many people

• Tesla's: To create the world's most compelling car company of the C21st  by driving the world's transition to electric vehicles

• Nike's: Bring inspiration and innovation to every athlete in the world

Clarity is essential when you want to scale the business. Before you take action, you need to know exactly where you want to go and what success looks like for your company. Many entrepreneurs who want to scale miss this step, which leads to unfocused growth and wasted resources.

Subway's vision is to offer a variety of great-tasting, customisable, and convenient meals, while also promoting nutritious options for a balanced lifestyle. Subway aims to be a nutritional leader by continually evolving its menu to offer better-for-you options. A key part of their vision is offering freshly made, convenient, and affordable food that customers can customise to their taste.

In essence, Subway's vision is to empower customers to make better choices for themselves by providing a delicious, convenient, and customisable dining experience that reflects a commitment to health and sustainability.

2. Understand your current and future market and ideal customer A well-researched definition and understanding of your market is one of the most powerful tools you can use to scale your business effectively. Without clear insights, even the best product or service can struggle to reach the right target audience to find, win and keep customers.

Look for untapped opportunities in your sector. Analyse competitors, identify trends, and study how customer needs are evolving. Then, create detailed customer personas that represent your ideal clients. These profiles will help you target your marketing and sales efforts more precisely, whilst also establishing the size of the market – important from a financial perspective.

Subway has been very effective in knowing their target customer demographic and purchasing habits. Subway's challenges forced them to innovate. They revamped their menu, improved their digital ordering system, and launched a new loyalty program. Sometimes, it takes a crisis to shake you out of complacency. Don't wait for trouble to innovate. Make it a constant part of your business strategy 

3. Strengthen your core offering Subway evolved and expanded their product menu progressively, besides providing a hyper-personalised offering. Before you scale, make sure your core product or service is as strong as it can be. Scaling a weak or unrefined offer will only multiply existing problems. Focus first on refining what you sell so it delivers consistent value and stands out in the market.

When Subway's performance became stagnant, they resorted to price-based promotions. This is a losing strategy in the long run. It devalues your brand and makes customers expect discounts. Instead, focus on creating and communicating unique value. Give customers reasons beyond price to choose you.

Gather feedback from your customers to identify what is working well and what needs improvement. Look for ways to enhance quality, add unique features, or streamline delivery. This process not only improves customer satisfaction but also lays a stronger foundation for how to grow and scale.

4. Invest in scalable business processes and systems This aspect of growth is often overlooked, but supporting a venture with 100 outlets isn’t the same as 1,000 outlets. Ensuring your operations can handle growth without breaking is vital to both unit economics and brand reputation. If your processes are inconsistent, scaling will become chaotic and inefficient. Scaling means keeping workflows running smoothly at higher volumes.

Identify repetitive tasks that can be automated to save time and reduce errors. Standardised processes not only improve efficiency but also make it easier to train new team members, which is essential in scaling a business sustainably.

5. Develop your positioning with memorable brand messaging and marketing The Subway brand was visible, supported by high profile marketing and clear, consistent messaging to attract and retain the right customers. Businesses that excel in how to scale a business treat their brand as a growth asset, not just a logo or colour scheme.

Ensure your branding communicates your value clearly and consistently across all channels. Combine this with a marketing strategy that uses a mix of digital, social, and traditional offline channels to reach your ideal audience.

6. Create a repeatable, scalable sales system that tracks cost of acquisition and conversions The primary objective of scaling is to grow revenues at reduced unit cost and increase market share, thereby increasing profitability and cashflow. You need a sales process that can deliver consistent results. Ad-hoc deals or an inconsistent outreach will limit your growth potential. Your aim is to turn new customers into repeat business, increasing the number of regularly paying customers .Put customers at the centre of your business model.

Start by mapping out the stages in your sales funnel from initial contact to closing the deal, tracking key metrics such as conversion rates, average deal size, and sales cycle duration. Ensure your sales efforts can handle higher volumes, build a sales engine and culture focused on customers. What got you to £500k revenues is unlikely to get you to £5m.

7. Invest in new technology Technology can make it far easier to scale by improving efficiency, reducing manual work, and supporting better decision-making. Choosing the wrong tools, however, can slow you down and create unnecessary complexity. Businesses that succeed in how to scale a business choose scalable, integrated solutions that grow alongside their needs. Focus on tools that integrate well with your existing workflows and processes. This technology-first approach can support future growth.

8. Build a high-performance team To grow with pace and scale, you need a team of aligned, skilled, and motivated people. Invest in hiring the right talent and develop their capabilities. A strong, empowered team is one of the most valuable assets when it comes to scaling a business effectively. Don’t just hire for today, hire for the future growth aspirations in terms of potential and roles.

9. Effective financial management Scaling requires a combination of risk taking and discipline, making ‘bets’ but then tracking the right numbers to identify what is working and what needs improvement.

Companies that master how to scale a business make data-driven decisions based on clear, measurable performance indicators without putting financial stability at risk. Monitor your cash flow and profitability closely to ensure you have the resources to fuel growth.

10. Regular strategy and operational reviews. The process to scale the business is never truly finished. Markets change, customer needs evolve, new opportunities appear, and new competitors emerge. You need to review progress, adjust, and go again.

Schedule quarterly reviews to assess your performance against your goals. Identify what is working well and where improvements are needed. Use these insights to refine your strategies and take the next step in how to grow and scale. This ongoing cycle of review and adaptation keeps your momentum strong and ensures you are always ready for the next stage of growth.

Subway's initial success came from positioning itself as a healthier fast-food alternative. But they failed to keep up with changing definitions of ‘healthy eating’. Your initial competitive advantage isn't permanent. You need to constantly reassess market trends and consumer preferences. Stay ahead of the curve, or you'll find yourself playing catch-up. 

Summary Scaling a business is one of the biggest challenges entrepreneurs face, not because they lack ambition but because they often jump into growth without a clear plan. The result can be overstretched resources, inconsistent delivery, and missed opportunities.

To scale a business successfully, you need more than just a good product or service. You need the right structure, systems, and mindset. Scaling is different from simply growing because it focuses on building sustainable processes that allow you to handle more customers, more revenue, and more complexity without sacrificing quality.