Over the life of a business, there comes a time where staying competitive means taking new risks. And in terms of risk, few things are as risky to a business’ success as scaling.
Less than 10 percent of businesses scale successfully.
These aren’t good odds. But, there are tips and strategies that boost your chances of success.
The first thing worth noting is deciding when a business needs scaling. Scaling is different from growth. Though many people use the two terms interchangeably.
How is it different? Well, growth is an increase in revenue, along with an increase of expenses. These increases occur at the same rate. Scaling increases revenue, but not while disregarding expenses. It incorporates strategies that boost revenue while limiting resource expenditures.
When you’ve had about six months of consistent growth, that is when you should consider scaling. By this point, the growing amount of work has overwhelmed employees. As a result, they work inefficiently. This creates challenges in operations, along with difficulties realizing long-term business goals.
Scaling successfully finds solutions for all these issues. So, how do you scale a business?
Make a Plan
Ah, plans.
What big activities are there in business that don’t have a plan?
Scaling is the same. You need a good plan if you ever plan on scaling successfully. Start with a vision for business growth. Flesh out this vision and reverse engineer it. When you know where you are going, finding the right path toward it becomes easier.
Set up achievable goals and stepping stones. These are your targets. Over time, work toward these targets. All the while, you are moving toward your final growth goal for your business.
Having a plan set up keeps you and everyone else at your business on track. It gives you measurable targets by which to track your progress. And, with that information, you make adjustments as needed so you continue progressing.
If you have a broad goal of scaling, without any plan, you won’t cohesively be working toward anything. Because you won’t have a clear pathway for getting there.
Keep Your Focus
In business, there is always a new deal. A new product. A new opportunity. If your goal is scaling, don’t let these new things distract you.
It’s essential that you maintain your focus. You already know your company. You know its strengths and weaknesses. The best revenue streams for it, and the worst. Focus on growing the areas you are familiar with. Don’t waste time delving into something new right now. Double-down on your strongest areas.
Scaling a business is not the optimal time for expanding into a new market or introducing new products. It’s possible, but it’s best saved for a different time. If you want a successful scaling process, keep your focus on scaling. Don’t split your attention worrying about new launches or opportunities.
Document the Process
Part of documenting the scaling process involves having a plan. Why? Because plans lay out your targets along the way.
With KPIs, SPOs, and other measureables, track your performance. See how the different areas of your company have improved during the scaling process. And make adjustments for areas that are underperforming.
Documenting your process helps you find where things went wrong. It also streamlines the hiring process. As you scale, clear documentation means new hires quickly see where you are and where you are going. This is better than extra training for each new hire for the process your business is going through.
Secure Financing
Scaling your business is not cheap. It requires a hefty dose of financial support.
As you scale, you’ll need funds for new technology. Funds for new hires, as well. You’ll be investing heavily in yourself and the business throughout the process. So, make sure you have a steady source of financing available.
This means either having a large financial reserve. Or forming partnerships with some investors or financiers. Whatever is necessary to ensure you have the money required.
As you go through the scaling process, don’t spend money precariously. Evaluate whether an expense is an investment. Or if it won’t benefit your company’s scaling whatsoever. If it won’t help, then save it for later. Similar to the point I made about keeping your focus, there comes a time for spending on different things. When you are scaling is typically not the right time. Save the money and wait for a later date.
Hire the Staff You Need
It’s safe to assume that your employees are overwhelmed if you are scaling. Sometimes, this overwhelm cannot be addressed without hiring more people.
Find strong talent that has the skills and knowledge you need both during and after scaling. Make each hire strategic. Find weak areas and fill them with personnel, as needed. If your sales team cannot keep up with new leads, hire some new sales personnel. If your shipping and receiving crew isn’t keeping up with orders, consider expanding it.
The cost of hiring new people is an investment. As long as you are strategic. Don’t spend time and money hiring someone’s best friend who has a couple months of experience in your industry. Hire someone who benefits your company. Someone who brings in value.
Some companies opt for outsourcing when they are scaling, as well. This is another option worth considering. But, the same point applies. If it won’t benefit you in the long-run, skip it. You are looking for value-based investments. Not personal ones.
Adopt New Technology
Another area that is worth investing in is technology.
You have likely implemented technology already. Perhaps you’ve employed automation already. Or streamlined payrolls processes with software.
But, if you haven’t, do it.
Implementing technology aids in the operations of your business. Not every company has the same technological needs. But, they all must be open to technological advances. If you don’t have technology, or it’s outdated, you are holding your staff back. As you scale, this becomes a larger issue. And a more obvious one.
By adopting new technology, you streamline your business. New technology may keep you from hiring a lot of new talent. It may help you stay connected with customers throughout the process, as well. Or aid in managing deliveries from manufacturers.
Either way, it’s a good investment. But make the investment wisely. Don’t bother buying technology that doesn’t improve your bottom line.
Connect with Customers
As you scale your business, you will have your hands full. You’ll be juggling multiple areas of growth. Plus, you’ll be managing the progress you make along the way.
But, do not forget about your customers.
They are the key to success in the business world. Without customers, you have no sales. And without sales, you have no way of continuing operations.
When you become busy with other things, forgetting about customers is highly likely. Your employees are already overwhelmed, so they pull back from customer interactions. And you’re busy with scaling, so you aren’t paying much attention to that part of your business.
Whether it involves hiring more people or implementing new technology, keep your customer interactions the same. Or increase them.
Scaling Your Business Successfully
The process of scaling a company is risky and challenging. It’s not impossible, though. Successfully completing the process requires some forethought. A good amount of consideration, too.
With these tips in mind, you are already on the right path toward finding success.
But, I make no claims that this list is exhaustive. Do your own research before you start scaling. There are more tips that pertain to different industries. And other considerations that I haven’t covered. These will get you started, but the journey to success requires more information.
The main thing? Be proactive. Do your due diligence and keep to your plan. You’ll be fine.