When you’re first launching your business, getting everything in place to land those first few sales is a huge milestone. Once the sales start rolling in steadily, however, you’re faced with a new challenge: how to continue effectively delivering your product or service as your customer base expands.
The processes and strategies that helped you make those first few sales often need to evolve in order for you to take your business to the next level. Creating a plan for scaling is critical to ensure that your business continues to thrive as it grows. When you need support, Ownr has a suite of features that are there to make growth a little less challenging, so you can focus on putting your best foot forward.
What is scaling in business?
Scaling isn’t something you need to (or should) focus on in the early days of your business. Your first priority should be establishing a solid foundation for your business and creating a product or service your customers love. Once you’re making steady sales, however, you can begin thinking about the next steps for your business. You might be familiar with the idea of scaling your business, but is scaling your business simply the same as growing it?
How is scaling your business different from growing your business?
Scaling and growing are similar concepts, but there’s an important distinction to understand between the two that can be boiled down to the ratio between your revenue and your expenses. Scaling your business actually describes a specific type of business growth in which you manage an increasing amount of work in a cost-effective way.
What does it mean to grow your business?
When your business is growing, it means your revenue is increasing but your expenses are also increasing at roughly the same rate. A basic example of this might be an entrepreneur who makes and sells jewellery. As the business becomes more popular and more orders are placed, the owner will need to budget for more jewellery supplies to fulfill the orders and potentially even hire and train another maker to help keep up with the demand. The business is growing, but more revenue means more costs.
What does it mean to scale your business?
Scaling, on the other hand, describes growing your business revenue at a faster rate than your expenses. Scaling in business typically focuses on introducing new systems that increase the efficiency of your operations and strategizing to grow your business without significantly increasing your workload or costs. You can think of scaling as more tactical, sustainable growth. Successful scaling means maintaining, or even lowering your business costs, while simultaneously increasing your revenue and managing increased operational demands.
10 Strategies for Scaling Your Business
Let’s take a closer look at 10 strategies you can use to scale your business and set the stage for supporting its long-term growth.
Set key milestones
Planning ahead and setting key milestones has likely been essential in getting your business to the point where you’re ready to scale and it’s equally important at this new stage of your business growth. Conduct an honest assessment of where your business is at today to determine if you’re truly ready to start scaling. Outline practical short- and long-term goals for your scaling and a realistic timeline for making it happen. It can be helpful to tie your goals to financing or other resources you’ll need to progress to each new stage. As you approach a new milestone, you’ll have specific guidelines for what you need to achieve in order to move forward.
Know your unique offering and business market
In order for your business to grow, you need to continually refine your unique selling proposition and target market. Reflect critically on how your offering compares to the competition, so you can leverage your business’s strengths to facilitate growth. In addition to having a clear sense of who you are as a brand, it’s equally essential to know who your customers are. When you know what your target market is (and what it isn’t), it’s easier to sell to your customers in a more consistent and, ultimately, scalable way. The better you understand why your business has succeeded so far, the more you can build upon your initial success.
Go beyond the business plan
You probably spent time developing a business plan in the early days of your entrepreneurial journey, and now is the time to take your vision to the next level by creating a business map. A business map documents the big picture purpose and goals of your business. The map can take whatever format feels most natural to you, whether that’s a diagram, flowchart, or another method for organizing ideas. Outline your reasons for founding your business; what success means to you; the kind of impact you want your business to have on your community; your strengths and weaknesses as a company; and your ultimate goals for your business. Your business map will serve as a valuable touchstone for decision-making as you scale.
Evaluate your finances
While effective scaling aims to minimize the costs of growing your business, it’s almost impossible to scale up your business without at least some funding. Many new small businesses rely on bootstrapping, but this strategy may not be sustainable as your business grows. You can turn to business lines of credit or short-term loans, or investigate funding and scholarships available for small businesses. Your strategy could also involve crowdfunding via a platform like Kickstarter or pitching investors who may be able to contribute funds as well as expertise to your business. Whatever your approach, it’s critical to plan for what funds will be required for your business to scale and at which stages you’ll need to have access to that capital.
Refine your product or service
The start-up phase of your business is a key time to request feedback and use it to perfect your offering. Problems that arise in the early days of your business are likely to be exacerbated as you scale, so take the time to address them while your business is still small and you have more flexibility to pivot your product or service. Listen to your customers and be ready to adapt your offering based on what’s working well and what isn’t. This strategy can prevent small issues from becoming larger as you scale and ensures you have a solid foundation upon which to grow your business.
Optimize your operations
The systems that work for you in the initial stages of your business often won’t be effective on a larger scale. A larger business often means more complex communications and processes. Consider how you can standardize workflows in order to streamline your operations. Technology can often be helpful in creating efficient organization and data storage. Whether it’s using management software to simplify communication between your growing team and assign tasks; or leveraging tools like Buffer or Later to minimize unnecessary time spent on your business’s social media channels, it’s important to start implementing tools that can keep your day-to-day operations running smoothly as you handle more sales.
Delegate to your team
While many businesses are started by a single person with a great idea, it can be challenging to continue operating as a solopreneur as your business grows. Focus your time and energy on projects that play to your strengths as a business owner and build a team that can handle time-consuming tasks that fall outside your key areas of expertise. Whether it’s bookkeeping or customer service, outsourcing the day-to-day tasks of running your business can free up your time to focus on big picture strategy.
Grow your brand
As you step up your marketing and promotion efforts to support the growth of your business, your brand identity serves as a guide for the types of business advertising that will best help you achieve your goals. A clear brand identity also ensures that your business’s image and messaging feel consistent across the wide range of online and physical platforms where customers might interact with you. Brand identity communicates what your values are as a business, helping you build trust and familiarity with your customers. Your brand identity can also extend to the company culture you aim to create for new hires. As you make decisions about how to scale your business, your brand identity can guide you in making decisions that align with your company’s ethos.
Build your network
Even the most astute entrepreneurs run into barriers in scaling their business and that’s when it can be helpful to have a personal network to turn to for advice. A strong network of mentors, coaches, colleagues and advisors can help you push through challenges, boost your morale and fill gaps in your existing skillset. Look for opportunities to join industry groups and attend networking events, or reach out to entrepreneurs you admire to see if they’d be open to mentoring you. Relationships with entrepreneurs and other movers-and-shakers in your industry can accelerate your ability to scale your business and open up new opportunities you may not have previously considered.
Identify and overcome growth hurdles
Effectively scaling your business isn’t as simple as doing more of what you’ve already done to achieve success thus far. As you prepare to scale, it’s important to step back and identify weaknesses in your current strategy that could impede the growth of your business. Perhaps the systems and structures you currently have in place are better suited to a start-up or small company than the kind of business you want to become, or maybe you need to step up your marketing efforts to compete with larger brands in your niche. Acknowledging potential hurdles and creating a plan to overcome them can smooth the process of scaling your business.
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.