The concept of scaling a business is often used interchangeably with growing a business, but these are two distinct concepts. Growing a business means increasing revenue, but you’re likely also using more resources (such as hiring more staff to deal with more customers or try to win more prospects). Scaling is when revenue increases without a substantial increase in costs, meaning you can support further growth—look at it as a more sustainable way of growing.
However, when a company grows too fast it makes itself vulnerable to a range of problems that stem from not having a solid foundation to support rapid development. Learning how to scale a business mitigates these risks by ensuring sturdy base operations that will support growth in the long term.
When is the Right Time to Scale a Business?
You should only take your business to the next step if you’re truly ready for a bigger enterprise. Scaling up means your company is going to take more time, resources, and expertise that you should be prepared to give. Scaling up is an exciting time, but you’ll need to get it done in a way that’s sustainable.
Here are a few questions to ask yourself to help you decide if it’s time for sustainable scaling.
- Are you ready to take on more strategic challenges?
- Will you be able to dedicate more time to your business?
- Do you have the financial resources available that you’ll need?
- Do you have the right employees to get the work done?
- Are you having trouble keeping up with orders?
- Are you falling behind on inventory?
Here are the most important things to keep in mind when figuring out how to scale a business in a thoughtful manner.
6 Steps to Successfully Scale a Business
When scaling a business, it’s important to identify strategies for growth that align with your original business vision while still managing the impact of growth on your company. The following tips on how to scale a business will provide a sustainable strategy you can rely on.
- Develop a Business Map
Business maps are an effective, comprehensive way for scaling a business and meeting its goals. Creating a business map prompts you to ask foundational questions and challenges you to look at where you came from, define your purpose for starting this business, and look to the future: Having this sort of documentation of your goals is a crucial part of learning how to scale a business and will be a helpful reference for when times get tough. Smaller businesses have the benefit of being able to shift gears more readily than larger corporations so if there is a need for a new approach, use this as an opportunity to innovate and adapt.
- Seek Capital
Scaling costs money, and you might need to identify the right time to seek outside investment to see your plans through and keep your cash flow flowing. That timing is crucial. Capital is something you want to secure before you act on plans to grow, rather than when your business takes off and you’re left scrambling for the funds to support it.
Capital is something Viewridge Funding can help with. We have the tools and expertise to make this a straightforward process for your business. We can help you avoid lengthy processing times and a ridiculous amount of paperwork. In addition to assisting you with the initial loan, we offer ongoing working capital in times of need that can help with business expenses.
- Perfect Operations
How to scale a business doesn’t just involve growing upward and outward – it also means ensuring that your internal processes and operations are functioning seamlessly. While perfecting processes, keep in mind that some of the systems and processes that work when your company is in its early stages won’t work on a massive scale. This is where adaptability and flexibility come in, as you may need to tweak processes as you grow. Establishing a framework of what works and keeps your business running smoothly in the early years is key to scaling a business because it forms a solid core. While you can always improve on this core as growth occurs, it’s much more difficult to go back and create it once you’ve grown past a certain level.
- Establish your Team
Employees are loyal to companies whose purpose and values align with their own so they can feel their careers have a higher purpose. Knowing your purpose and successfully communicating that to your team is the way to make them raving fans of your company and drive growth in an organic manner.
Creating specialized roles may also be beneficial as you grow. It’s important to have proactive roles, skilled managers who handle the account from a business perspective and build relationships with the customer, and reactive roles, experienced managers who are approached by customers to solve issues.
Later, you may divide roles further based on customer needs, creating a separate role for the onboarding phase of the account and another role for the renewal phase. Each role is specialized, allowing people to become experts in the role, which helps us deliver higher quality services. You can also divide specializations by account lifecycle, where different roles are responsible for distinct stages in an account life cycle, or by product maturity and complexity, where you may want different roles specializing in different areas of the product.
Scaling up also means you may no longer be able to do everything yourself, so you will need to rely on who you’ve recruited so far to make your business work. Once you’ve built a dedicated team, you should have enough trust in them to delegate many important tasks so you can work “on” the business instead of “in” it. To really scale a business, you must delegate tasks to those on your team.
- Connect with your Customer
The goal should always be to create a raving fan – someone who will be a staunch advocate for your brand and help you scale your business by spreading the word. Having a solid network is an important part of scaling a business.
When scaling a business, you’re in an incubation period where there’s room to test approaches to building and maintaining client relationships. This is the time to build client-centered practices into every facet of your business. You want every member of your team to demonstrate empathy, respect, and open-mindedness internally so that a collaborative culture of innovation emerges. From there, everyone on staff can build rapport with your client, creating connections that will help your product sell itself.
- Continue Adapting and Innovating
Scaling a business may seem impossible if you’ve hit a plateau. The truth is, learning how to scale a business is never impossible, but you may need to change what you’re doing if you want to scale successfully. Don’t change your company just for the sake of change – when you strategically align your choices with your ultimate purpose, scaling your business will come easily. Remember that massive growth is one thing, but it’s sustainable growth that makes for a lasting company.
Challenges of Premature Scaling
Here are a few of the key challenges we’ve identified when scaling a business prematurely.
- Complex workflows: As the team grows and becomes more specialized, more complex workflows and processes involving more stakeholders come into play. There can often be a steep learning curve when it comes to creating, implementing, and maintaining these complexities.
- Organizational efficiency: Rushing through the evaluation of processes can easily create inefficiencies and duplicate work. It’s important to constantly evaluate and measure progress, effectiveness, and impact.
- Onboarding new employees: Investing in an onboarding process for employees could have fallen to the back of the priority list because you were eager to get new hires into the swing quickly. But the onboarding process is crucial in the long run. It will promote efficiency, ensure the new teammates feel like a part of the team and cultivate motivation to succeed in the role.
Scaling doesn’t just need the right plan, but the right timing. Growing too quickly can lead to expenses you can’t pay, employees you don’t actually need, or a supply chain that’s grown out of control. Conversely, not scaling at the right time could mean orders you can’t fulfill and tasks going unfinished. Scaling responsibly, and with intention, are the keys to maintaining business continuity through growth.