Learning how to scale your business can be a long process for business owners. It can also be hard to do when you have your livelihood or other’s livelihoods on the line, particularly when a new year is starting. Scaling doesn’t have to be scary, though.
The best thing to do is to be informed and strategic about your scaling. If you’re considering scaling your business or are ready to scale right now, here are ten tips to help you.
1. Know what business scaling means
Scaling your business is not the same as growing your business. Often these two words are used interchangeably to mean “more money” or “more customers.” In actuality, business growth means that there is more money or more customers (or both). In contrast, business scaling is the intentional, guided expansion of your business both in operating strength and revenue. The key to this definition is operating strength. Business growth can bring in small returns but may be unsustainable for your business. Business scaling helps that growth become sustainable.
2. Understand when you’re ready to scale
Don’t scale too soon and watch for key indicators. Some key indicators your business is ready to scale include:
- Market demand: there’s a growing need for your product or service.
- Healthy profit margins: your business has the necessary funds to support scaling.
- Strong operations: your business is running smoothly and has flexible infrastructure.
If you’re in the healthcare or renewable energy industries, take a look at these indicators in your own business. According to the Bureau of Labor Statistics, healthcare, particularly hospice services, and renewable energy are some of the top industries that have been growing quickly and are slated to grow in the next few years.
3. Assess your operations and resources
Your industry might be slated for growth, but that means nothing if your business doesn’t have the necessary resources to scale. A thorough assessment of your operations and resources is essential before any kind of scaling.
Carefully look at those key indicators mentioned previously, and do an inventory of your finances, expenses and needs. Risk management and assessment will help provide a foundation for your scaling strategy and plan, and it will continue to be useful as you scale.
4. Set measurable and realistic goals
Before you can even begin the steps for scaling, it’s necessary to establish what you’re working towards. Giving your business a goal can help guide your strategy, and it can also give your business something to rally around—increasing morale for employees.
A measurable goal is essential for tracking your progress and guiding your plan as it is implemented. If your goal is too generic, like “increase profits” or “get more customers” then you risk also having a generic scaling plan that may fall apart when looked at in detail.
5. Make a well-structured scaling strategy
Once you’ve set goals, putting in place an organized plan is the next step. The more strategic and structured you can be with your scaling, the more likely you will be successful. It can be useful to look at what other businesses in your industry, or with your structure, are doing. However, don’t let other businesses rule exactly what you will do.
What scaling looks like will be different for every business. Opening a new location may be a great option for a restaurant or café but wouldn’t apply to a software or e-commerce company. Crowdfunding may be the next step for scaling a software company or introducing new products might be next for an e-commerce site. Licensing may apply to many kinds of businesses.
Whatever your next step, do it intentionally and strategically. Plan out what each step will be and who the key players are to help increase your chance of success.
6. Listen to your mentors and employees
Be sure to include employees in both your plans and communication. If there are parts of your scaling strategy that affect certain employees, include them in your plans and communicate with them before executing your plan. Employees may also have great ideas that can contribute to your plans and your goals.
For solopreneurs, don’t be afraid to ask others for help! If you have a mentor, take time to consult them and think about the pros and cons of bringing on additional personnel as needed.
7. Leverage technology in intentional ways
Technology can be an amazing resource, particularly for small businesses. AI is the new buzzword when it comes to technology, but businesses should be wary before jumping into the newest AI tool. Not only can its adoption lead to backlash from customers, but it may also not be necessary for your business at all.
However, if used correctly, AI can be useful tool for upgrading your businesses capabilities, particularly for automating certain customer service tasks and helping pull insights from your business’s data.
8. Don’t sleep on a good marketing strategy
Having a good business is not only about having a good product or service— it’s also about establishing trust and drawing in the right customers. A good marketing strategy can help do that and, in turn, help support business growth.
If needed, hire a marketing specialist to help find your voice and brand. Use social media and promotions to help attract more customers and drive demand.
9. Manage your finances carefully
Having enough revenue to scale a business is only half of the battle when it comes to scaling. Successfully managing that revenue can be huge for scaling your business effectively.
If you don’t have a ton of profit, using a loan can still be a viable option for scaling your business. Small businesses can look at SBA loans or other kinds of loans that can support your scaling plan. The key is to be smart and carefully assess if a loan is a good option for you.
If you’re thinking about getting a business loan, consider consulting with a business banker or other advisor to help guide you through the process.
10. Evaluate, evaluate and reevaluate
You could have the best scaling plan ever conceived for your business, but it could all break down if you don’t regularly evaluate how that plan is affecting your business.
Take time to regularly assess your scaling plan and your own goals. Don’t be afraid to adjust your plans or your goals as needed.
Whenever and however you plan the scale, California Bank & Trust bankers can help inform you on the financial decisions that can support your business. Learn more about our business banking or contact your local branch for more information.