Five Signs That Its Time To Scale Up Your Business
Every entrepreneur wants to scale up their establishments in order to reach more customers, make more sales, increase revenue collection, and build modern and more sophisticated business infrastructures. But scaling up a business requires additional investment and, unfortunately, there are no guarantees that increased investment will yield revenue growth. You can diversify your product offering, reach out to and even score new markets, but still fail to achieve the consistent growth that you hoped for. That is unless the timing is right. But how do you know if the timing for scaling up your business is right? By observing these 5 signs:
1. Your employees are thirsty for change
Maybe you have the money to invest, but is your team ready for growth? If your best-performing employees are not on board your scaling plans, it will be risky to move ahead without bringing them on board first. Your team must be excited by the challenges and opportunities that the planned growth will bring if they are to be optimally productive going forward. Convince them by promising better compensation and career development opportunities if everything goes well. Your other option would be to go back to the drawing board and hire new employees who are open to change, but that can be both too risky and too expensive. If, however, you are forced to make changes in your workforce, it is advisable that you do so in liaison with Japan employer of record or an employer organization near you. Such an organization will help you navigate the labor and employment laws when firing change-resistant employees and replacing them with more flexible personnel.
2. You have the right technology
Having great products and a high-performing team is a plus, but the key driver of business growth these days is technology. Are you convinced that your IT infrastructure is self-sufficient? You at least need to have warehouse management, point of sale management, purchase order management, payment processing management, and inventory management systems in place for easy automation and management of the core aspects of your business. If you depend on managed service providers for most of your IT needs, are your current providers reliable? If you have that sorted, you have the green light to start thinking about scaling up your customer base and product offering.
3. Everything is almost too easy these days
You had business goals when you started your business, and you have already attained them all and probably surpassed some of them. You are now far ahead of your peers. The original mission and vision, the value proposition you initially had, and the standards you set for your business are all too straightforward these days. If that is your situation, you are running the risk of getting too comfortable and eventually sliding into a comfort zone. You need to get out of there lest your peers catch up with you. You need to set more difficult but attainable goals and take your business projections a notch higher.
4. Your business knowledge and skills are overflowing
You have accumulated a wealth of knowledge over the years and you now feel the time is right to put that knowledge to test. Your senior management also looks ready for new and bigger challenges. Your PR skills are unmatched in the industry, your company already has a strong community around it, and you have mastered the diverse customer expectations in your local market. You have sponsored your employees for training programs and they all are twice as better now as they were when they first joined your company. They may not tell you this but the more skilled they get, the more they crave promotions. The only way to create opportunities for them is to scale up.
5. Your business network is big enough and still expanding
Business growth means new customers, new challenges, and new opportunities. Sometimes it will mean new products, new marketing approaches, new vendors, new employee structures, and new staff. It will be hard for your business to scale up if you don’t have a strong network to support you on your way up. You need someone to help you navigate the pain points of dealing with government regulations, someone to assist you in your upcoming mass staff recruitment, someone to help you with funding, business advisors to help you make sense of different market studies and case studies, online influencers to push your brand, and offline brand ambassadors. You need a reliable network to tap into, not random people you just met.
Steps to take when scaling your business
As seen above, scaling a business depends on the capacity and capability of the existing business. Before you start scaling, you need to make sure that you have the capacity to accommodate growth. You also need to be sure that your infrastructure, systems, and team are capable of handling the potential influx of customers. You could be operating efficiently with the current resources because you can handle the numbers. However, when the numbers start increasing, it is a different story altogether.
You don’t want a situation where it gets chaotic with orders falling through the cracks, delayed processes, burnt-out employees, and worse, unhappy employees. That is why it is important to approach scaling in a systematic manner. Here are the steps to follow when scaling your business.
1. Draw a business plan
I am assuming that you have assessed your business using the above guidelines and have established that your business is ready for scaling up. If you have, the first step would be to write down a plan. Start by doing a sales projection of the sales that you want to achieve by month. This is the point where you include the number of new customers that you want to target, how you will get to them, and the sales strategies that you are going to employ. Don’t forget to include timelines that you want to achieve these milestones. This will act as the benchmark that you will continually use to evaluate your progress.
Next is to look at the expenses. Take a good look at your current expenditure and analyze how each expense is going to be affected by the scaling up. Don’t forget the expenses that will come with the scaling. Be careful not to understate the costs to avoid running into cash flow problems before going far.
2. Assess your funds
Just as starting a business requires money, scaling up requires money as well. You will need to add new sales representatives to handle the increased number of sales. If you were operating manually, you might want to invest in technology to speed up business processes. You might also need to automate repetitive tasks. In addition, increased manufacturing needs could demand new equipment, more storage facilities, and additional sales outlets. Not forgetting that you need to invest in new and vigorous marketing strategies to reach out to the customers, among other expenses.
Listing down these costs estimates gives you a clear picture of the amount that you will need to scale up your business. You can then start looking for the funds to set the scaling in motion. Consider the options available to you and pick one that is viable for your type of business.
3. Do the rest
After you get the funds, it is time to work on the logistics. Start by putting up a solid sales structure to position your business to generate more sales. This includes a sufficient lead flow, a marketing strategy, a sales management system, a billing system, and a strategy to manage orders.
Evaluate which technologies you need to invest in to save on labor and gain large economies of scale. Consider automation and process integration, robust marketing, sales, accounting, inventory, and any other business management systems.
Assess your sales team to identify which positions you need to fill. If you need sales managers, consider promoting from within. These people understand your products better, so they will lead the rest of the team from a knowledgeable point. If you need to hire new talents, be sure to hire the right individuals that align with your company culture. As you scale up, your organization might outgrow some of your talents, especially those that are rigid and have refused to continually upskill. With that in mind, assessing the team could also mean letting go of such individuals. You need to be realistic with your team to ensure that they have the capability to scale up with the business.
After you have put a team together, it is time that you set each individual’s expectations. State clearly the goals and objectives they are expected to achieve. In addition, lay down key performance indicators to measure their performance.
The key take-away point: Being profitable is not a reason for you to scale up. You need the right skills, technology, and networks to help you with your growth plans. Take your time to build your networks so that when the time to expand comes, you will have someone to hold your hand for the better part of the growth journey.
You should also remember that scaling up your business comes with it a lot of changes. You will have so many things demanding your time and energy. Be personally prepared to handle these pressures. However, you should be vigilant to maintain the business values that have held your business together over the years. Losing them could be detrimental to your business survival.
Guest Submission by Christian Kruse. Opinions are of the author.