- 10 July 2022
- by Andrej Fedek
- Blog
- 0 Comments
Source: MassMedia Group
What does scaling a business mean? Why is it important?
It is important to understand the meaning of ‘scaling’ a business because there is a distinction between ‘scaling’ and ‘growing’ a business.
Scaling a business means you can handle an increase in sales, work, or output in an efficient and cost-effective way. It also means that this growth is handled without your company suffering in other areas as a result.
Your companies’ ability to scale is about capacity and capability. If you grow your business and are selling at a much higher rate, will your company be able to accommodate the growth and provide the best customer service possible to all your customers?
7 Steps to Scale Your Business
- Develop a Roadmap or Timeline
In order to scale your business, and scale it well, you are going to want to link your businesses capital with each phase of growth. Start by figuring out when you will run out of cash, and work backwards from there to identify the milestones and targets that you need to meet — and hopefully exceed. By moving backwards, you allow yourself to develop a fully-budgeted roadmap that will reveal exactly where you stand from a strategic finance standpoint.
This roadmap will allow you to envision the entire scaling process before you even begin. It’s a great tactic that can help identify what needs to be accomplished when, and help assure C-Level executives that your company has enough capital to proceed.
- Invest in Technology
Scaling a business, is only made easier and cheaper when you are using technology to your advantage. Your scalability is increased with far less labor if your time and money are invested in the proper technological assets.
Multiple system integration plays a huge role in determining the scalability of today’s businesses. CRM systems, inventory management software, tax compliance software, and digital marketing tools are just a few examples of technology systems that are immensely helpful spurring growth. For greater success implement to CRM and Google analytics integration and find out where your sales are really coming from
Without these kinds of systems, streamlining your operations will require more labor and attention and, as a result, hinder your scalability. The systems mentioned above help bolster the core processes of nearly every modern business, and their implementation should be standard procedure for companies looking to scale effectively.
Source: Green Book | Market Research
- Automation
Your business’s investment in technology should include an investment in automation software.
Automation of marketing, sales and customer service is one of the easiest and fastest ways to make sure no time or money is being wasted on repetitive tasks. In addition, automation reduces the possibility of human error.
The largest benefit of automation is freeing up time for your busy employees to focus on truly important tasks, rather than time-consuming ones that can be accomplished with the help of software products.
If a prospect signs up for an account on your website, are you going to have one or more employees manually writing emails welcoming them to the company? That would be a colossal waste of resources and tedious for the person completing that task.
With automation, that same email can be sent in a fraction of the time and without any input from your employees.
- Plan for New Employees and Office Space
Scaling your business is obviously a high-cost operation that entails lots of careful planning and deliberate decisions.
Your roadmap will likely include hiring additional staff, buying more or new equipment, and leasing extra office space. Hopefully, if you follow step one, you will have all of this accounted for already.
Planning for new employees and office space is important because it represents a drastic change to the day-to-day operations within your company. Plan it carefully and make sure you’ve accounted for all possible costs associated with the expansion.
- Identify Ideal Customer
The process of identifying your ideal customer may take some time, but in the long run it will be monumental in moving your business towards sustainable growth.
By knowing your ideal customer and pursuing them, you can build a loyal client base that will grow alongside your business.
Finding your target market is one great way to help in this process. By not attempting to appeal to too many different groups, you will be able to understand your customer better and develop a scalable and profitable way to sell to them.
- Network & Collaborate
The saying goes “your net worth is your network”, and while it may be a little cheesy, it highlights the importance of networking in business.
Scalability should not just be limited to internal growth within the company but should strive to include collaborations and partnerships outside of the business too.
Developing strong, reliable, and trustworthy relationships with other companies and professionals is key to your long-term success.
Build a network of possible collaborators that include service providers, suppliers, sales partners and more. What may begin as one partnership or collaboration could become a formal alliance that boosts your company’s scalability potential.
Use a custom QR code generator to create QR codes with your logo that you can print on your business cards, business magazines, advertisements, or even on your social media channels. By scanning the QR codes, users can interact with your business by filling out a form to work or collaborate with you and your business or even sign up as a member.
- Identify Your Competitive Edge
You should identify your competitive edge and run with it. As your business scales, you will undoubtedly expand your understanding of your market and products.
An example to think about: The owner of an auto-body shop realizes after scaling that his company is far better at providing high quality replacement items than they are at fixing existing parts.
With this knowledge, the owner decides to abandon fixing parts and fully establish his company as a high quality replacement part business rather than an all-around general auto-body repair shop.
Find out what your competitive edge is and lean into it!
The Most Common Business Scaling Mistakes
Mistakes happen, but here are some mistakes to completely avoid as they can be detrimental to your company’s scalability:
- Scaling too quickly – If your company acquires an increased customer base and demand for sales, but doesn’t have the employee capacity to handle it, your customers will notice, and it could be detrimental to your company. Be sure you can handle the increased workload.
- Hiring too early – Essentially the inverse of the mistake above. If you hire new salespeople before you have an increased demand in sales, you will be stuck paying employees who don’t have any sales to make.
- Too much focus on marketing and selling – Of course, marketing and sales are pillars of your business and should be a focal point. However, if you are neglecting customer service in the wake of this focus, you will end up with unhappy customers who don’t stick around for long.
- Running out of money – Improper planning and not facing reality can lead to companies simply running out of money. This is why the creation of a roadmap and timeline are crucial to the success of any scaling process.
How SaaS Companies Can Scale Their Business
Software companies are blessed with a natural ability to scale due to the nature of their service. Typically, they are able to sell their product to more customers with very minor additional costs.
The ease of scaling, from a monetary angle, comes from the basically non-existent cost of adding more customers to their servers.
Source: Seek Capital
The Bottom Line
Scaling is important because healthy and sustainable growth is good for your company. The right time to scale your business is when you can draw out a roadmap and make a realistic timeline that seems achievable.
If you are flush with cash, can see the path to expansion, and have talented employees in every department you are probably in a great place to look into scaling your business.
Andrej Fedek is a digital marketer. He recently started his own blog about digital marketing called InterCool Studio. His passion is to help startups grow and thrive in a competitive environment.
