So you became a CEO and built your small business… now you want to scale it! Scaling your business will take your profits to the next level, but the growth process calls for careful planning and execution. Smart scaling starts with a pre-evaluation to make sure you’re ready.
Read on to find out how business leaders scale the right way to grow your business successfully.
Evaluate & Plan
This should go without saying, but before you begin scaling your business, you have to do some analysis and planning. You don’t want to waste time putting together a scaling plan, only to discover that you really aren’t ready. Make sure your startup is in a good position to invest in growth. Here’s a good set of qualifications to determine if you’re ready to scale:
First, your business’ income and cash flow should be consistent. But in addition to that, you should already be profitable. You should also have a team in place, along with solid processes and procedures for tasks among different roles. You don’t want to try to scale when it’s still just you and your co-founder, sweating out 16-hour days on three hours of sleep. Your team can be small, but it should be strong and one that you don’t feel like you have any need to micromanage.
This is important. Without great communication at every level and clear, effective processes, your attempt to scale will fizzle out. Not even the best product can save a small business owner from disorganization in the ranks or small business burnout. If the roll-out of your scaling efforts is stumbling or confused, you’ll miss out on the opportunity…and customers and partners will pick up on it.
Lastly, your business model should be solid—that means you have gone well beyond the proof of concept stage. Once you know you have a solid foundation, you are ready to scale.
First, however, you have to be sure you have an “endgame” in mind. Figure out where your business is now, and where you want it to be by the end of this scaling phase. Make goals specific, such as “service 30% more clients by Q2 of next year,” or “release three new product skews by 2020, expand product line availability into Canadian markets.” Include goals for various timeframes.
Once you know what your short, medium and long-term goals are, start planning by determining what aspects of the company you should invest in, and what each will cost. Always assume things will cost a little more than you think!
Invest in the Business
Now that you have your scaling plan and budget, it’s time to invest! Whether it’s new equipment, new facilities, developing product, or hiring staff, this is the phase where you put your money where your mouth is. When you begin this part of the process, automate as many tasks and processes as possible.
Once you have mastered automation, you could potentially scale from 15 employees to 50, all the way to 500 when the time comes. Automated expense management systems allow for more accurate data and streamlined tasks like budgeting, expense reports, and tax compliance. These tasks are tedious and time-consuming when performed by people, and are completed with more errors, so automating them is saves you a massive amount of time and money.
When it comes time to scale, you also may need to turn to outside funding. There’s nothing wrong with this…just be careful about diluting ownership in the business you worked so hard to found and build. Don’t be afraid to get creative when you’re fundraising, as there are more ways than ever to bring in new outside investment. Think peer to peer fundraising, Kickstarter campaigns, and more…the possibilities are bountiful!
Secure Sales to Grow
You have investment and you’ve put that money to use. Now it needs to translate to increased sales and revenue! This customer acquisition push will require a marketing strategy which, hopefully, you already came up with during the planning phase. Introducing new products? Make sure customers find out about them. Expanding your suite of services? Customers need to be informed!
Use every marketing tool to your advantage, and automate every process that you can. Social media campaigns can be designed and queued up, and email marketing campaigns scheduled to run targeted blasts at new leads and current customers. Follow up on any existing leads you already have.
With your marketing plan in place and ready to be automated before you begin scaling, you’ll prepared to hit the “go” button as soon as you have everything lined up.
Invest in Technology
We’ve touched on this before, but it’s so important it bears repeating: automation technology is key for scaling your business successfully. Automation technology will decrease costs, increase productivity, allow you to turn more of your hard-earned revenues into profit.
The more processes and tasks you can automate, and the more systems you can integrate, the more you will be able to support your own growth. A company that is growing in customers but doesn’t have the infrastructure to support them is just as doomed as a company that didn’t gain the customers at all.
Focus on investments in hardware, software, and network systems that automate as many aspects of your business as possible. Then you and your employees will be free to focus on the work that matters most: growth!
Done right, outsourcing is a fantastic way to bring on new help to support your company’s growth efforts. The key phrase here is, “done right.” A good outsourcing effort can be one of your key growth strategies, but you have to make sure your new hires are specialized, qualified experts. Don’t just higher the cheapest contractor—if they cost more than someone with less experience, you get what you pay for. Find help with specific strengths that are extremely specific to the tasks they’ll be assigned.
Before you hire, however, you need to figure out what to delegate to outsourced help. Tasks that are a good fit are often those that are tedious or specialized, but critical: data entry, reception, administrative assistance, accounting, bookkeeping, and web design are a few examples.
Customer support is another great task to outsource while you scale, and bears special mention. Since you will (hopefully) grow to have lots more customers, you’ll need to provide more customer service as well. Expand your team of reps accordingly—this is a great job to outsource, as there are many qualified candidates seeking temp or contract positions in the customer service field. Once you’ve done some outsourcing, keep track of key metrics to make future efforts even more successful.
Growing your business is important, but there is a right way and a wrong way to go about it…it’s all about having a strategic, goal-oriented mindset. One of the classic pitfalls of founding a startup is that rapid growth occurs faster than the organization can handle it, causing enough misfires that the company eats up all of its funding before profitability.
Don’t just focus on business growth—focus on smart businessgrowth. Combined with a focus on serving your ideal customer, you’ll have a formula for long-term scalability success!