One of the mistakes you can make when launching a startup is to start a business that is not scalable. It's especially important for small businesses to scale up for them to grow or remain competitive.
This article highlights key steps to help you scale your small business.
What Does It Mean to Scale Your Business?
To scale your business is to invariably increase productivity and profitability by leveraging people, technology, systems, and processes. Scalability describes the ability of an organization to adapt and continue to do well even when both its workload and its scope have increased or expanded.
Overall, scaling a business is about sustainable growth. Whether a new business can achieve sustainable growth is really the difference between a failing startup, a struggling one, and one that's crushing its growth goals.
For example, some businesses are constrained by location, time, and expertise. As a result, they can only do one thing at a time, by several individuals, and in a fixed location — therefore, lacking the potential to be scaled. Some other businesses can be scaled but quickly reach their peak performance and productivity level.
Most founders and investors aspire to grow their company to be massively successful.
However, starting a small business that you can't scale up means that you have to trade your time for little impact or returns. The result of this might be you experiencing burnout.
The Importance of Scaling Your Business
Scaling your business is a critical part of growing your business. The marketplace is quite competitive; it's difficult for businesses to continue to survive if they are not growing. Additionally, scaling can give you a huge competitive advantage, helping you keep up with or surpass your competitors.
Scaling can have a huge financial impact on startups. It can be rewarded in terms of access to capital, valuation, and, eventually, whether the company can go public. Things like profitability and whether the core measures of a business are improving with scale are critical vital signs that many investors look out for.
Steps to Scale Up Your Business
Scaling a business is an intentional effort — it requires both planning and the execution of those plans. Below are a few steps you can take when considering scaling your business.
Desire to Grow
There is no such thing as accidental growth; every kind of growth requires intentional effort. First, and perhaps most obviously, business owners must desire to grow their business. Many early-stage ventures lack the will and ambition to scale up. One reason might be that their dreams include building a business to support a certain lifestyle, not necessarily building a legacy.
Taking steps to scale up your business begins with a strong desire to grow because growth is intentional.
Manage Your Finances Well
Having a positive cash flow is key because scaling a business or sustainable growth requires funds. When scaling, you may need to get more employees, open new physical locations, or increase your advertising spend. Therefore, to successfully scale your business, you need to manage your cash flow well. One way to build a culture of effective financial management is to use a system that makes tracking your income and expenses simple, such as Skynova's accounting software.
Have Standardized Business Processes
For a startup to grow, business owners need to have systems and processes in place. Businesses that succeed at scaling are businesses that put in place a system that allows them to run anywhere following certain repeatable procedures. This may require making certain investments, such as providing necessary support systems that encourage automation of tasks, including IT and training personnel accordingly.
Consolidating your business processes into a document will ensure that your business can run without your presence. It will also simplify the process of hiring, onboarding, and getting the best out of your employees.
Invest in Employees
As mentioned when defining scaling, people (employees) are very important for business growth. Before considering any form of growth, you need to ensure that you have a team that can help drive your business's growth goals.
When planning to scale, you will need to get more hands on board. This can be done either by employing full-time staff or outsourcing certain key responsibilities.
Similarly, in a case where you already have employees, you may want to consider giving them any necessary training. This will help them measure up to the demands of the next level of growth you desire.
Seek External Advice
More often than not, entrepreneurs are so blinded by their attachment and commitment to their businesses that they can't correctly analyze their present position and the possibilities of growth available to them. This is why it is advisable to seek external advice when you are considering scaling your business.
Focus on Getting and Keeping More Customers
Scalability can't be discussed without talking about getting and keeping more customers. Whether it is franchising, opening new locations, or launching a new product, scaling requires that you reach new clients or customers.
The following marketing strategies shared by Forbes can help you acquire new customers:
- Offer new customers discounts and promotions.
- Ask for referrals.
- Recontact old customers.
- Participate in community events.
- Partner with complementary businesses.
- Promote your expertise.
- Take advantage of online ratings and review sites.
While all of these ideas can help with customer acquisition, delivering top-notch goods and services and maintaining good customer service can help convert your customers to loyal and repeat buyers.
Create a Strategy for Handling Growth
As an entrepreneur, you need to set realistic growth targets. In addition, you need to develop plans and concrete actions of how growth will be achieved. Business is like playing a game of chess — you need a strategy if you are going to win.
Business growth also comes with its own challenges, such as a growing workforce, increased consumer needs, or new compliance responsibilities. As a business owner, you must foresee these challenges and develop a strategy to cope with them.
Make Decisions Based on Data
Data gathering and analysis both play major roles when deciding when and how to scale your business. You also need data when making decisions on the next level of growth you should aim for. It's difficult, if not impossible, to create strategies until you have defined what your competencies are.
Analyze your strength and the strength of your market and target customers in a bid to make informed decisions.
Nothing can take the place of execution when it comes to scaling a business. Taking action is the final step that gives meaning and purpose to every other step listed above.
Go ahead — implement, document, and analyze your results so that you can learn and improve the scaling process.
Effectively Manage Your Business Finances With Skynova
In planning to scale your small business, one of the crucial challenges you may face is how to effectively manage your business's finances. Fortunately, Skynova has that challenge sorted out for you already.
Skynova's accounting software can help you manage your income and expenses in one place. You also get access to 37 software modules online (no download necessary), all of which are specifically designed for small business owners like you. Skynova also offers a variety of business templates to help you streamline important paperwork.
With financial management worries off your plate, you can focus on other activities that will make it easier to scale up your business.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always meet with a professional business consultant to brainstorm the best growth approach for your business.