Check your business can scale
Scaling a business is where you can increase sales exponentially without having to add the same level of overhead (for example, sales double but costs either don’t increase, or only marginally).
You probably know how much work or production you can handle each month (a certain number of hours in the day, employees, equipment, locations or channels to market). If you’re hoping to grow fast, it’s useful to think about your future capacity and what you’ll need to do to be ready to increase your output. What would you need to do, to increase capacity ten times beyond your starting level?
There are a number of actions you can take to help ready your business to scale:
Capability is your internal ability to run the business faster and bigger by having the right equipment, people or resources on hand to do the job, or the facilities to do it in.
Ways to build capability include:
- Adopting the latest technology to automate as much as you can
- Implementing quality control systems to reduce errors or returns
- Access to additional resources at short notice
- Using suppliers who have the capacity to keep pace with your growth
- Ensuring your premises or location is suitable for expansion.
Think about what infrastructure contingencies you’d need in place if you did experience exponential sales growth and how you’d cope with sudden success.
Be prepared to grow
Sketch out a draft roadmap of other channels to market to manage extra demand, so you’re ready to invest your energy and money when the time is right.
There are a number of different ways to sell more of what you do, for example:
- Open more stores and locations
- Move to larger premises
- Purchase faster or newer machinery to increase production
- Find new markets
- Widen your product and service range
- Sell online
- Import to complement production
Also look at future partnerships. Identify those businesses that are complementary to yours who are prepared to collaborate and share marketing, staff, customer and production expertise and resources to speed up your development.
Maintain the customer experience
It’s a common problem, you start up and have personal contact with every customer, then as you grow, you’re so busy you don’t have the time to attend to every need. Doubling sales can often double customer queries, complaints, calls, returns and demands on your time. Loyal customers can get disillusioned and leave, so it’s important your customer experience can scale with sales growth.
To help do this:
- Delegate customer contact early to key employees
- Use Customer Relationship Management (CRM) software to maintain contacts
- Use technology to predict customer buying behavior and preferences
- Develop automated customer loyalty programs.
Remember, your customers are the most vital component of your business so making them feel they’re been listened to and rewarded is essential, no matter how large your business grows.
Grow the team
Most businesses rely on adding employees to share the load. To help achieve this be careful when recruiting so you have the right people in the right roles or have a pathway for employees to access future training to develop the skills you need.
If you don’t want to add headcount, identify if you can sub-contract out services or joint venture with other businesses.
Fund for growth
To increase capacity for scalable business growth you may need additional capital. Even if your business is enjoying a healthy cash flow, expansion is often more cash hungry than you thought. Go through all the usual capital raising steps you did on starting up and find out how much you are short. Then determine where the best place is to access the money you need.
Scaling up a business is much easier if you have thought about the implications before you set up, or at least very sooner after. Some of the best small businesses plan out how they can scale before they start, which increases their chance of success. You can too.