If you want your company to succeed, you’re going to need a plan on how to scale your business.
By focusing on scaling rather than merely “growing” your company’s finances, you can generate greater revenue without ramping up costs or diminishing resources along the way.
What Is Scaling in Business?
Scaling in business means increasing the size and scope of operations. But without clear direction, attempts to expand can backfire and can hamper your business.
There are ways to scale your business, but first you need to determine if your business has scalability.
Does Your Business Have Scalability?
Scalability refers to your business’s capability to perform under an increased workload or an expanded scope. For a business to scale, it must be able to maintain its standard performance level when tested by increased market demands and production rate.
Small businesses have low operating costs and little overhead compared to larger companies that are weighed down by inventory and warehousing. Keep in mind new technologies can make increasing production a more affordable and accessible prospect. Even businesses based around intangible assets, such as professional services, can scale successfully.
When preparing to scale your business, you should have the following long-term goals in mind:
- An established value ladder of products and services
- Available subscription packages
- High customer retention rates
- Diverse income streams
- Predictable revenue
Each of the above targets are known predictors of a sustainable and scalable business model. If the above conditions are met, chances are your business model is scaling properly and efficiently.
Give your company the time it needs to grow and develop to the point where scaling seems more like an imperative than an option.
When the time is right, scale up your small business by following these 7 steps:
- Overcome Cash Constraints
- Develop Management Skills
- Team Build
- Standardize Processes
- Focus on Core Offerings
- Capitalize on What Sets You Apart
- Put a Strategy in Motion
7 Steps to Scale Your Business
1. Overcome Cash Constraints
You’ll need funding to scale up a small business. There are several ways to secure funding, including some of the more standard options:
There are alternative options that can help you overcome cash shortfalls more creatively. Today, an increasing number of businesses are relying on different funding mechanisms to finance their scaling plan, including:
- Joint ventures with established players
- Invoice factoring
- Creating new predictable revenue streams
2. Develop Management Skills
Developing a wide-ranging management skillset is essential before you scale your business. As a business owner, you’re used to wearing many hats during the early days of your business, but knowing how to effectively teach, train and delegate tasks to your employees are mission-critical skills for scaling.
Scaling in business often requires bringing new personnel on board to avoid bottlenecks and optimizing workflow so tasks aren’t concentrated in your hands.
For companies looking to scale, you need to be prepared to lead by example to create a winning workplace culture that generates trust and mutual respect.
3. Team Build
Scaling your business also involves identifying potential partners in the market.
As a business owner, you naturally understand the value of building out your professional network. But when scaling a business, you also will need to leverage other people’s talents and expertise when it comes to executing a scaling strategy.
Take a critical look at the talent pool in your company—are you missing a high-level finance person, or a marketing team leader to help drum up business? Be prepared to either hire or outsource for key responsibilities and tasks to construct a team that’s able to sustain an increased workload.
4. Standardize Processes
It’s important for businesses beyond the startup phase to implement repeatable day-to-day strategies and standardized workflows, especially as you prepare to scale your business.
Leveraging technologies and full-suite software packages can help business owners focus on higher-order tasks and expand their company while saving time and keeping upfront costs low.
Consider using software to help automate:
Aside from automation, standardizing your business processes will help as you build your team. Documenting and distributing a clear set of instructions to the personnel responsible for handling a certain activity will make scaling your business that much smoother.
These instructions should be repeated regularly and will ultimately convert an otherwise complex task into a structured regimen. Whenever confusion arises within the team, they can refer to the process checklist rather than you.
5. Focus on Core Offerings
To operate at scale, business leaders need to concentrate on mastering the company’s core competencies and where you offer the most value to clients and customers. In every company, there are daily or weekly tasks that generate more leads and greater revenue than others. Those tasks must be prioritized and ramped up because they are the ones that stimulate growth.
If these key operations are unclear to you, speaking with an external advisor can offer a fresh perspective and key insights.
Focusing on the wrong aspects of the business results in delayed growth at best and a fracturing of the team at the worst.
6. Capitalize on What Sets You Apart
For your business to be successful, you must have a competitive edge over other companies in your market. This is beyond your product or service offerings—think how you provide your offerings, rather than what those offerings are.
With a critical eye, assess what exactly your business brings to the table that other businesses don’t. While it is important to continually build on strategic weaknesses, it’s equally critical for scaling businesses to identify, develop and effectively market their strengths.
7. Put a Strategy in Motion
If you want to scale your business, you need to be able to draw up a big picture strategy that envisions where you want the business to go, target revenue and what share of the market you want.
This strategy should include your endgame scenario. Formulate a plan for leaving the market after you’ve scaled, whether you want to cash out, go public or make the company your personal cash cow. You need to have this vision clear for you and your partners.
Scaling Your Way to Success
Remember, the crucial elements required to bring your business to scale are:
- Developing leadership skills
- Bringing in the right team
- Delegating and systematizing processes
- Playing to your company’s strengths
Follow these steps to build a scalable company that has all the predictors of sustainable growth.