Follow these tips to scale your business successfully.
As a small business owner, you know all too well that the life cycle of a small firm has ups and downs that can be difficult to predict. Just as some operations are getting off the ground, others are closing up shop, while still others are taking steps to scale up. Just remember that every major company you've heard of began as a startup.
A business can scale when it is equipped to handle increased demand and still be profitable. Not all business owners want to scale up, and not every business model is well positioned to expand. But if your company is thriving and you are motivated to take it to the next level, there are several things you must do to successfully scale. Here are six of them.
1. Determine your likelihood for success.
Businesses that are good candidates to scale share certain traits:
- Customer loyalty and high rates of retention
- Repeat purchases from the same customers (i.e., a subscription)
- Predictable revenue
- Multiple streams of income
Conversely, if every sale you make requires incredible time and effort on your part, if customers make a purchase and you never hear from them again, or if you wonder who your customers are and where the next purchase will come from, then your business model is not yet scalable. Focus on resolving these unknowns first, because a poor process will only be amplified once you try to expand.
2. Define your goal and your plan.
Unbridle your ambition, because your business will only scale as much as you allow it to. Then, identify precisely what needs to happen internally to enable that growth. Say you want to double your revenue next year. That could require a significant amount of marketing. What if your sales suddenly tripled overnight? Do you have inventory on hand or the workforce necessary to service that demand?
Make a list of all your processes. Identify any weak points or areas that could be handled more efficiently. Research solutions and assign a budget to line items. It could be that you will need to invest in technology, hire more staff, purchase more supplies or increase your marketing efforts. Maybe you will need to do all these things, which will require money to fund it all.
3. Know where your money is coming from.
If you are making plans to scale, then you are going to need more money – much of it upfront. By now you know that things like paying suppliers, marketing your product and managing inventory require you to have working capital on hand. That's not even taking into account any additional overhead or payroll if you have employees.
Fortunately, there are several ways for a business like yours to raise funds. You might consider crowdsourcing, applying for a bank loan, or asking friends and family. You could even seek out investors.
Before you go asking for money, prepare a pitch deck that effectively presents your business as stable, scalable and cash flow positive. Additionally, you will want to highlight what gives you a competitive edge in your industry.
4. Automate and delegate.
You have limited time in a day and many tasks to accomplish. If you intend to scale your business, you won't be able to dedicate hours to areas that don't move your company forward in a strategic way. It may be time to invest in technology. Indeed, automating basic tasks will save you time and allow you to focus on growing your operation.
For example, as your business grows, having a human resources management system (HRMS) like Workful will enable you to quickly and easily onboard new employees, run payroll, track time and attendance, and stay ahead of changing regulations. Even if you only a have a few team members now, the software will grow with you as you hire new employees.
Of course, not all responsibilities can be automated. As you scale, new roles may appear – and you might not be the best-suited person for the job. For example, say you are the top salesperson on your team, and when you pound the pavement, your sales increase significantly. Your skills are not being utilized if you are at a desk trying to manage your social media.
The fact is, as the business owner, you can't be involved in everything all the time. Delegating tasks to other qualified members of your team will not only alleviate your workload but also demonstrate to your existing employees that you value their input and talent.
If the demands of your business are increasing but don't yet warrant hiring another full-time employee, it may be time to outsource. Hiring help on a freelance or contract basis is increasingly common today, and you can outsource just about anything: human resources, accounting, website design, content creation and beyond. Depending on your budget and needs, you might work with an agency or an individual contractor. To ensure you get the help you need without sacrificing quality, consider candidates with demonstrated expertise and experience. Of course, you don't have to outsource in the dark; turn to your network for recommendations.
6. Build your network.
Seek out people who have already done this, and talk with them about their experiences. Find out what they learned, what strategies they used, what obstacles they encountered, and what, if anything, they would do differently. Don't stop there, though. Ask who their mentors are, and then speak with them as well. Be proud enough of your business to talk about your business. You never know what doors could open when you do.