You started a small business and, after lots of ups and downs, the company’s foundations have been set and things are going well. But the business is beginning to approach the point where progress is slowing down and earnings are starting to hit a plateau. These are the signs that it’s time to take the next step forward: it’s time to grow and expand your company.
As challenging as it is to start a business in the first place, the process of enlarging the operation will come with its own hurdles that need to be cleared. You won’t want to embark on the next chapter in your company’s story without first learning about what you should expect and how to handle the challenges ahead.
For that reason, we’ve compiled the top 6 tips for how to scale a business for you so that you’ll be able to perfect your business scaling strategy. Keep reading and discover how to scale your business like an expert…
What does scaling your business mean?
If you’re asking “what does scaling your business mean”, you’re not alone. So no sweat! You’ve come to the right place.
Every hugely successful company that you know began as a small startup at one point. Each and every company eventually reaches a threshold where changes need to be made in order to maintain profitability.
Scaling a business essentially means increasing or expanding the workload or scope of a company while ensuring its ability to cope and perform under larger operational demands. To put it in other words, “a scalable company is one that can maintain or improve profit margins while sales volume increases.”
The principle sounds simple enough, but in order to successfully scale up business, the structure of the company will need to adjust so that the growth rate won’t be stunted by the increased weight of demands on the system. In fact, roughly 70% of startups experience difficulties when attempting to scale up business.
Imagine that your business is a house. If you use toothpicks and glue as construction materials, you can build a miniature house that will stand on its own pretty well. But the bigger you build the house, the more it will become apparent that you’ll need stronger materials in order for the house to stand under its own weight.
But what are the challenges of scaling a business?
What is the right business scaling strategy?
And how do you scale up business?
Why do many companies struggle to scale?
If you want to find out how to scale a small business, the first thing you need to learn is what not to do. Aside from having a reliable business scaling strategy, you’ll need to know what common mistakes you should aim to avoid.
What are the top mistakes when scaling a business?
1. Maintaining old structure – if your company is made up of less than 10 people, there’s a good chance that you’re the sole decision-maker. But as your business grows in size, the way that things work starts to change – and those changes continue happening for as long as growth continues. A 50-person operation will have a different management structure than an operation made up of 200 people.
2. Prioritizing pricing – as your business expands, it may become easier to offer more competitive prices to customers. It’s important, though, that your main focus not be to just make prices lower; quality will ultimately suffer if reducing prices is your main concern. You’ll want to balance the quality of your service (or product) with your drive to remain competitive so that one priority doesn’t jeopardize the other.
3. Hiring the wrong people – naturally, as you scale your business, you’ll need to hire more employees and expand your professional network. It’s easy to hire any average Joe who can do the grunt work – it’s harder to filter through applicants and make a measured decision as you fill all of the new positions. And hiring people haphazardly doesn’t only have an impact on the individual roles being filled, but also affects the overall company culture.
4. Scaling too early – this is one of the biggest mistakes that business owners make when it comes to their business scaling strategy. Many founders think that, even if their product or service hasn’t been perfected, issues will resolve themselves with time. On other occasions, business owners might start scaling a small business without conducting enough research into the industry to assess the existing demand for their product or service.
When you start to scale your business, you’ll inevitably be confronted with obstacles (including those listed above). After you prepare for those pitfalls, you’ll also want to learn how to scale a business successfully. That means shifting your focus towards planning a strong business scaling strategy.
How to scale a small business
You came to find out how to scale a business, and here you have it. Don’t be the person left wondering, “what does scaling your business mean?” Use the following expert pointers to perfect your business scaling strategy.
The top 6 tips for how to scale a small business:
- Design simple and efficient systems
- Prioritize customer experience
- Obtain financing for scaling up business
- Delegate tasks to employees/outsource
- Sharpen up on SEO practices
- Most importantly: Think Big
We elaborate on each of the 6 tips below…
1. Design simple and efficient systems
Within a small company, you might be able to get away with having fairly complex procedures for getting things done. Perhaps because you were the only decision-maker, it was easier to get things done “your way”. But now that your company is getting bigger, it’s important to make processes as simple and practical as humanly possible.
- Use SaaS to streamline internal and external operations
- Schedule regularly occurring procedures, including meetings, bill payments, reviews, system updates, etc.
- Combine roles/responsibilities where possible in order to eliminate confusion.
- Communicate your mission clearly
- Direct employees and clients towards the company’s goals more easily
- Change direction if/when necessary with fewer hiccups
2. Prioritize customer experience
Simply put, no amount of paid advertisements will ever be quite as valuable as a recommendation from a satisfied customer. In fact, 92% of consumers around the globe express that they trust word-of-mouth recommendations above all other types of advertisements. That’s why, if you decide to scale up business, it’s absolutely imperative that you invest in developing a pleasant customer experience. This includes investing in expanding your payment trends.
- Offer online profiles/platforms where customers can use your services easily
- Offer alternative means of payment – credit cards, bank transaction, mobile, crypto – the more the better.
- Develop a reward program to improve customer retention (returning customers spend 67% more money than new customers)
- Let customers know that you’re listening by asking them for feedback through quick surveys (68% of customers don’t return because they believe you don’t care about them!)
- Monitor customer behavior in order to better understand their preferences
- Give your customers an incentive to spend more money
- Learn what changes you can make to improve your business
3. Obtain financing for scaling up business
At the outset, scaling your business will come at a cost. For that reason, you’ll want to make sure you research your expansion funding options. Alternative lending services, such as Become, offer an easier way for businesses to get approved for a business loan. There’s no need to wait weeks to get financing when there are online funding solutions available at your fingertips.
Of course, the type of business will affect the kind of industry loans a business needs, as well as the specific circumstances that business finds itself in. Be sure to weigh your options carefully in order to choose the right funding solution for your business.
- Start the business loan application by filling in the requested information (industry, business age, monthly revenue, etc.)
- See which funding options are offered to you from more than 50 leading lenders
- Select a financing solution and get funded in as little as 3 hours
- Scale up business quickly, instead of waiting months or years for your savings to grow
- Fill one application for 50+ lending partners, instead of 50 separate applications
- Get matched with the optimal funding solution for your specific financial profile
4. Delegate tasks to employees/outsource
Pick people you trust to keep an eye on the company as it grows and evolves. You can’t do all the work on your own, but you also can’t afford to hand over responsibilities to people who aren’t willing or able to handle the job. Also, consider taking a business partner who can help shoulder some of the weight.
- Hire employees who know how to scale a small business
- Only handle urgent and important matters yourself
- Create a decision-making hierarchy so that questions will pass through several levels before reaching you
- Ensure that tasks, no matter the size or scope, are handled promptly and efficiently
- Eliminate the time that you personally spend on minor details
- Produce an environment where employees feel a sense of responsibility and authority
5. Sharpen up on SEO practices
People trust organic search results, and that’s where improving your SEO (search engine optimization) practices comes into play. Paying for ads will place you at the top of the search rankings, but most of us don’t trust those first few results on Google because we know they bought their position. Studies show that Google ads receive less than 15% of all the traffic coming from online searches.
- Optimize your website’s images
- Learn how to use keywords wisely
- Make your website mobile-friendly
- Grow your business’s visibility, extend exposure
- Naturally increase incoming leads and ultimately improve sales
- Up your search ranking; more than 70% of searches on Google result in a page-one organic click
6. Most importantly: THINK BIG
The most crucial tip for scaling a business is to THINK BIG. The quickest route to success is to fail quickly and fail often. Every failure is a learning opportunity; if you limit yourself to operating within a safe space, you’ll avoid falling but you’ll also keep yourself from reaching your fullest potential.
Step outside of your comfort zone and move off of the beaten path – you may be surprised to find what opportunities await you!
- Take risks, try new angles
- Stay aware of current events in your industry
- Track and measure your growth
- Make sure you have an ultimate goal for the business which you are always moving towards
- Know your destination so you can assure that you’re moving in the ‘right’ direction
- Discover what works for competitors (and what doesn’t), and stay ahead of the learning curve
- Analyze and assess your own progress so that you know where and when to make changes to your business strategy
Scaling a business is a fundamental step towards realizing the full potential of a company. It might not be an easy feat, but it’s necessary if you want your business to continue succeeding.
Want to scale your business? With the advice in this article, you’ve got a solid foundation to start doing just that.
We hope you find the information helpful, and if there are any questions that were left unanswered please let us know in the comment section below!