How to Scale Your Small Business?Written by Mindaugas on May 14, 2018
Being a business owner – an entrepreneur, grants you the ability to change the world you live in and improve people’s lives within your community and outside of it. You are one of the few individuals who had the courage to swim against the stream.
With the right attitude and an awesome idea, your business has a great chance to succeed. As you grow and evolve, you will need to grow along with it, and adapt to the increasing expectations.
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You were able to prove your worth to the consumers and the word quickly spread. Business is doing good and you’re considering to up your output; spread your wings just a bit more. Maybe it’s time to consider scaling up your business?
What Does “Scaling a Business” Mean?
Before dwelling deep into what it takes to scale a business, we should go over what ‘scaling’ means in a business sense. Some of you may think that ‘scaling’ a business may mean climbing the building of your local fast food place – that’s not the case.
Scaling business operations is the expansion of your capacity to produce, to supply and the ability to tend the needs of your growing consumer base more effectively.
Not everyone want’s to increase their business operations. This requires more resources, altering business structure, cultivating new business relationships and more. It’s additional work that some people may not be able to or want to put in.
Let’s compare scaling a business to running a marathon.
The median marathon time for men in the United States is around 4 hours and 20 minutes. You decide to run a marathon too, and you happen to finish it in about the same time. Nothing wrong with running a marathon in 4 hours and 20 minutes; many people couldn’t even run a marathon if they had an entire day.
To improve your time you must dedicate additional time for training, maybe even change your diet. It can take months of hard work to see improvements in your conditioning.
Same thing applies to scaling your business. Some people are content with with their respective market penetration, while others want to expand and improve further.
Consider the Health of Your Business
Before taking this plunge, you need to assess your current business and how well it’s performing. As a business owner, you must always be aware of all the pertinent details in regards to your business functions.
In the beginning, you had goals that had to be accomplished – at least I hope you did. Hopefully you’re creating new ones as you progress.
Go over all the goals you had set out for yourself. Were you able to complete them? Are you looking into the future? Is your business performing as well as you had hopped or perhaps it’s doing much better?
If you are goal-oriented and are able to fulfill the tasks you set out for yourself, you are on the right track to scale up.
But that’s not all you need to think about when proceeding.
Scaling Too Soon
There is a saying -“don’t count your chickens before they hatch”. This means that something that happens in the future may not always pan out the way you had hopped. This ties into business scalability quite well.
It’s dangerous to assume the best case scenario in the future and jump straight to investing more money for expansion. You may be sinking sizeable chunk of your capital that may not pay off in the end.
No one can predict the future, and if they can, they’re probably a millionaire.
As a business owner who is looking to expand their operations, there needs to be a pattern of continuous growth to consider scaling.
Some businesses are sensitive to seasonal demand. I’ll give you an example.
I am writing this post from Northern Europe. Now in winter time, there is no need to hire any lawn-keepers or gardeners to tend my flowers. The demand for them in the winter time is almost non-existent. Now come spring time, the demand for that type of work ramps up.
Holiday season may require more people handling e-commerce orders and delivery guys to handle shipments.
These are just a few examples of when demand may spike and create a temporary need to scale up your business. Depending on the type of business you operate, the need to expand may vary.
Look through your income sheets, your invoices, and see if there are any spikes in your demand and when it occurs. It can give you a time frame where you can expect to have more customers and when to scale up your operations.
Supply Doesn’t Meet the Demand
The demand is too great and you struggle to keep up. Now this can mean a few things. Your price may be too low for what you offer, or you just need to take a step forward and begin scaling up.
You have made a name for yourself in the market, and people are really liking your product. Your customer base is growing, and people are coming back for more. Now you have figured out that this is not just a seasonal trend and you actually do need to invest more money into your business to cater your growing customer base.
Scaling up in this scenario is a good next step. You must consider the fact that when you increase the output, your quality cannot falter. Some businesses tend splurge in the beginning and when they expand, they cheapen their product. Customers will notice that and may jump ship.
Outgrowing Your Capabilities
Outgrowing capabilities, in this case doesn’t mean your inability to supply your consumers with products or services. What this means is other business operations that relate back to the overall well-being of the company –
- Marketing and promotions;
- Customer support;
- Product development;
- Customer acquisition;
Your production isn’t the only thing that may need scaling up when running a business. When your consumer base grows, so does the overall burden on the company. While scaling your business, your entire workforce may need to be scaled up too.
You can also consider outsourcing the non-essentials.
Invest In Your People
“A great leader is nothing without the team.”
A quality team is great and is one of the most essential things you can have to create a successful business. Invest in your employees and it will pay off greatly.
When you invest in your workforce, you reduce your turnover and attract the best talent. Not to mention people are more inclined to go above and beyond for you and to produce their best work.
Reducing turnover is a great way to reduce business expenses. Having to constantly lose and replace employees is not a cheap endeavor. Finding new people, training them, and getting them used to the work environment uses a lot of resources and time. That’s something you want to avoid at all costs if you want your business to move forward.
Scaling your company is hard as it is. Having motivated employees that stick around make this process a whole lot easier.
Set More Goals
I mentioned goals before in this post, and I will mention them again. Goals and aspirations in life and in business are essential. You need to have a vision, a direction in which you are going and what you aim to accomplish.
Once you are looking to expand and to scale up, you should be creating new goals that align with your growing business.
Put This Knowledge To Work
Scaling your own small business can be a nerve-wracking process. It involves committing to uncertainty hoping to come out on the top.
With the right knowledge, this process can go a lot more swimmingly. Knowledge is power, and you have just been empowered in case you decide to expand your business operations.
Assess the current position of your business. Take the information you gathered here, and see if you’re ready to make the next big step.