8 Keys to Upscaling Your Business

How to scale your business

Your business has many different aspects, each of which must expand and support your overall growth plan. Here’s a step-by-step guide to scaling your business.

1. Ensure your business is ready to scale.

Successful growth requires meeting specific criteria. Consider the following crucial characteristics when determining whether your business is ready to scale:

• Strong demand: Is there a robust market demand for your products or services? Have you kept your business competitive? Consider your sales numbers and how much your profits have grown and evaluate your market research and how competitive your business is in the space.  
• Excellent financial management: Your business must have solid financial management practices in place to accurately assess the capital needed for growth and the ability to manage your funds responsibly. Signs of solid financial management include appointing an internal chief financial officer and a competent accounting and finance team. You may also consider hiring a certified public accountant (CPA) to benefit from outside financial expertise.  
• Growth-oriented culture: Before scaling your business, you must ensure it has a growth-oriented and flexible culture. Without one, your organization won’t be able to quickly adapt to new people, increased demand and updated processes.

2. Create a growth plan and budget.

Consider how quickly you want to grow and what resources you’ll need to accomplish your goal. These factors will inform your growth plan and budget. Create a realistic and conservative budget (one that assumes higher costs to cover any contingencies), so you know how much you’ll realistically need to invest in your growth plan. 

Incorporate revenue forecasts into your growth plan and budget. Estimate when you expect to see additional revenue and how much. These forecasts will help you determine the timing of distributions from your internal or investment growth fund. As you implement the plan, your finance team should monitor your progress continuously against the forecast and make necessary adjustments.

3. Obtain and set aside your growth investment funds.

Expanding your business requires dedicated funding. Before moving forward with your growth plan, ensure you have enough financing earmarked for your initiatives. It’s important to note that your growth investment funds should be separate from the money allocated for current operating expenses. The amount you set aside will depend on how aggressive your growth plan is and may need to be substantial.

If your sales are strong and profit margins are high, you may already have sufficient funds generated from your operations. If not, you must decide if you want to finance your growth with equity from an angel investor or venture capitalist or apply for a business loan. 

4. Work with suppliers to increase the supply of products and raw materials.

Call your existing suppliers and let them know about your growth plans. Determine if they can handle increased shipments in a timely manner. If so, now would be a great time to negotiate better terms, whether extended payment timelines or a volume discount. If they can’t handle the extra orders, look for and vet suppliers that can provide the extra output you need.

5. Hire additional staff as necessary.

If your growth plan involves hiring for your business, prepare a plan detailing your open positions, their salaries and your hiring timeline. For example, you may need to hire outside salespeople and customer service reps urgently, while you may eventually need to hire additional staff for your billing department. Your needs will determine your recruitment strategy and timeline. 

Many companies outsource business processes to grow their business if they need people temporarily to implement a growth plan. If you go this route, carefully evaluate your outsourcing partner to ensure it can fulfill your needs cost-effectively.

6. Reevaluate and modify internal processes.

Increased business and additional staff will likely prompt you to modify processes and operations. As workloads increase, some jobs might need to be delegated to other employees and other tasks might be eliminated or automated to increase productivity. 

7. Implement the necessary technology to support your growth.

As your company grows, it will become more challenging for employees to perform operations manually or undertake processes with multiple steps. Streamline your operations by investing in technology and workflow automations that will improve productivity and free your team. 

For example, instead of manually counting inventory items, consider implementing a  radio-frequency identification system that instantly accounts for palettes full of goods. Other tech investments include automating customer support emails, using Slack to boost productivity and communication and automating accounts payable processes. 

8. Create and execute a marketing and sales plan to reach your growth goals.

Your sales revenue is a vital component of achieving profitable growth. To help you achieve your growth goals, creating and executing a sales and marketing plan to boost your revenues is crucial. Your plan may include new marketing initiatives, stepped-up advertising spending or hiring new sales representatives.

Consider incorporating existing personnel and tools to fuel your expanded marketing and sales efforts. For example, have current account representatives email customers and prospects about new products or form a co-marketing relationship with a complementary company servicing the same market.

Tips for scaling your business

Given the potential risks involved, here are some tips for making the most of efforts to scale your company.

1. Have a plan in place to upscale your business.

Scaling your business involves stepping out of your comfort zone, which requires careful planning to succeed. A well-structured action plan is crucial for maintaining product and operational quality while expanding and introducing new processes. This plan will also help you minimize risks and potential losses. Start by identifying any barriers that could impede your growth so you can develop strategies to avoid or overcome them.

2. Know your customers.

Identifying your target audience and serving them well is critical for upscaling success. While amassing new customers as your business grows is essential, ensuring your customer service quality is undisturbed during your growth plan is also critical.

Put yourself in your customers’ shoes and consider how actions in your business scaling plan may affect them. Anticipate their needs at each stage of the scaling process so they never feel lost in the shuffle. Your happy, established customers can become your biggest brand ambassadors as you grow, helping you maximize your returns.

3. Spend time wisely.

When expanding your business, the saying “time is money” holds true. To keep your growth on track, ensure all scaling activities are time-bound.

Unanticipated urgent tasks tend to present themselves at the worst times, such as during expansion and scaling. Implement time management tools and strategies to maximize your time to ensure your team remains efficient throughout the growth process and can accommodate last-minute changes or deviations in schedules and tasks.

Train your team to observe time management tips and develop time-management skills. Software solutions, such as Microsoft Project, ClickUp and TaskQue, can help.

4. Consider big data.

Big data refers to the process of analyzing large and varied amounts of data in great detail to expose specific information, such as market trends, customer preferences, hidden patterns and unknown correlations. When scaling a business, big data insights can help you make informed decisions about your expansion’s dimensions.

A comprehensive understanding of big data and its usage can help you avoid losses and make better decisions for your business scaling and growth. It can also be valuable for identifying and eliminating underlying bottlenecks in your operations, thereby increasing internal efficiency.

5. Anticipate your team’s adjustment pace.

No matter how prepared you feel, organizational change necessitates an adjustment period for your team. Give them time to recognize the need for change and accept the challenges of your upscaling opportunities. More importantly, they need time to understand their roles in the bigger picture of your company’s plans and determine how to use their skills to add value to the business’s new direction. Consider adjustment protocols and allocate a reasonable time for such adjustments in your scaling plans and process.

Large corporations usually have change leaders in place to determine practical plans and execute systematic implementation. Predicting the pace of your company’s adaptation to change will require an in-depth understanding of your team. Sometimes, the best way is to consult and negotiate with your staff on your plans to scale. Welcome their ideas and concerns (whether during meetings or via anonymous feedback channels) to better understand their points of view, anticipate their adjustment pace and garner their support in your expansion.

6.nKnow your team’s strengths and weaknesses.

Upscaling gives you a chance to identify strong team members and weak links in your organization. While it’s important to consider your team’s feedback and opinions about when and how you should scale, monitoring their performance amid the expansion is equally important. Trying to scale up with a team that’s highly resistant to change or working with people who lack essential skills may be counterproductive.

Getting to know your team better will provide insights into your employees’ capacities, skills and character and help you make better decisions about the company’s future as you try to maximize your growing organization’s potential. By understanding your people, organizational values and customers’ expectations clearly, you’ll be better positioned to decide when to scale and how to proceed. 

7. Hire dependable managers.

Any increase in operations and production will eventually require expanding your staff. When that time comes, you’ll need reliable leaders and managers who are aligned with your long-term goals and fully supportive of your mission. These professionals will play a key role in guiding new hires, providing proper training and helping others embrace your objectives.

Cultivate your organization’s leaders by acknowledging their strengths and achievements while clearly communicating your mission. During company crises and periods of change, it’s crucial to rely on people who can get the job done while consistently keeping your vision in mind.

8. Decentralize and automate.

We touched on investing in technology earlier when sharing the step-by-step process of upscaling your business. However, tech investments are about more than streamlining operations. Successful upscaling requires tools to help you decentralize and automate tasks to free up your time and energy and allow the business to grow and flourish. Still, letting go of the reins can be challenging for entrepreneurs accustomed to handling everything themselves. It’s essential to remember that letting go can help you facilitate business growth and focus on objectives better. 

Part of the decentralization process is delegating to your team. You must show your team that you trust their insights and decisions. When employees feel appreciated and trusted, they’ll know they’re in the right place to pursue a long-term career plan, which better positions your business for future growth. 

Automating processes is also critical. Workflow automation tools can help you put social media marketing, lead generation, email marketing, customer relationship management (CRM) and more on autopilot. You and your team can spend more time and money on productive and vital activities instead of stressing over minor repetitive tasks. 

Many of these tools include artificial intelligence (AI) components that can help efficiency skyrocket. Stand-alone AI tools can also help you minimize time-intensive tasks like research, writing and analysis. Additionally, machine learning-based AI tools can help you make more informed strategic decisions for your business and its growth.

Mistakes to avoid when scaling your business 

Avoid the following mistakes that can derail your upscaling efforts: 

• Hiring the wrong people: Businesses must hire for a cultural fit, especially for positions of power. Determine if potential new hires have values and morals that align with your business. Ask about their personal goals to ensure they fit your organization’s mission. Invest in people who are willing to invest their time into your company long-term so they can add to, not detract from, your growth efforts.
• Prioritizing short-term growth over long-term sustainability: You might think scaling your business as quickly as possible will result in even more growth and positivity for your brand. However, growing a business too quickly is a mistake that can cause you to sacrifice product quality and the customer experience. Prioritize product quality and the customer experience to enjoy long-term sustainability rather than being a flash in the pan. 
• Having messy accounting: Small business accounting can be straightforward, but as you grow, it becomes more challenging to manage profit margins, sales conversions, projections and taxes. Some businesses face dire financial repercussions when they don’t prioritize financial accounting. Hiring a CPA and working with the best accounting software can help you keep your finances orderly.
• Relying on projections: It might be tempting to use sales projections to grow your business. However, anticipated sales don’t always happen at the rate you expect, potentially leaving you with too many employees and poor cash flow. Play it safe and only expand your business based on existing numbers, not predictions. 
• Hiring bad leaders: Scaling your company involves hiring or promoting new managers with the skills needed to guide and lead your growing business. A leader with the right skills and vision can achieve exceptional results, but poor leadership will get you the opposite.
• Ignoring issues that arise: Upscaling your business might throw you out of your comfort zone as uncomfortable situations present themselves, such as problems with staff, processes or products. You must address these issues as soon as they arise. If you ignore them, they’ll fester and create larger headaches in the future.

Create sustainable growth

Scaling operations at some point is inevitable for most successful businesses and risky decisions must be made for survival and growth. Still, business owners should take measures to minimize risks and ensure their growth efforts have a chance to succeed and flourish. By implementing the right strategies and keeping clear of common pitfalls, you can reduce inefficiencies and increase your chances of scaling up your business successfully.

Jennifer Dublino contributed to this article.