The notion of scaling a business has firmly established itself in today’s business lexicon. And that’s understandable, since most business owners dream of growing their business from the first day they open their doors. But what’s actually meant by scaling up a business? If you gain a new client or offer a new product that requires you to hire more staff or use more resources, are you really scaling your business? Most importantly, what’s involved in developing a business scaling plan that supports the growth of your business?
What Does It Mean to Scale a Business?
To effectively grow almost any business, there are several key aspects to consider, including staffing, funding, customer satisfaction and business processes. Scaling a business involves investing sufficient time and effort to ensure your business can grow unimpeded by factors that could derail it. So, you need to implement a scaling plan that takes a hard look at what your organization needs to grow successfully.
What Is a Scaling Plan?
Imagine you have a new product you’re convinced will bring new customers and increased revenue to your company. But how will you meet the increased demands to manufacture, deliver and support your new product? Or, if it’s a new service you’re offering, how will you meet customers’ demands without increasing your workforce? And in both cases, how will you ensure your employees are properly trained and prepared to answer customers’ questions and concerns?
Regardless of the type of business you run, you need a business scaling strategy to be sure your organization is ready for its anticipated growth. Note that business expansion can be challenging. As an example, consider a company that suddenly takes on more business but winds up dropping orders, miscommunicating with its customers or failing to correct issues in its supply chain. The company won’t actually experience growth — and it may even lose business in the long run.
How Do You Scale a Small Business?
To protect your business during its potential expansion, let’s take a look at what’s involved in implementing a successful scaling plan for the majority of small businesses.
The following points aren’t meant to be an exhaustive list. Instead, each area represents an essential aspect of your business that needs to be prepared for the demands growth will place on it. Naturally, there may be other areas you may wish to include in your scaling plan, as well.
- Evaluation: The best scaling plans begin with a proper evaluation of your sales forecasts. Consider carefully all additional resources you’ll need if your business suddenly increases its sales by 200 or 300 percent.
- Funding: Calculate how much financing you’ll need to support the demands of your business’s growth. Then, look at all possible sources of funding — from small business grants to low-interest loans — and choose the one that makes the most sense for your business model.
- Sales: Set up a sufficient sales system, so your business can take the necessary steps to generate more sales and process all related invoices in a timely fashion.
- Technology: Evaluate which business automation software could help you do more in less time. This could be anything from the integration of all your business software, so it runs more efficiently to the implementation of a new inventory management solution to deal with an increase in vendors in your supply chain.
- Staffing: Examine whether outsourcing or partnering with other services could be a more cost-effective way of meeting the demands of everything from customer support to payroll and other financial functions of your business.
To learn more about scaling your business to support its growth, contact us today.