As a small business owner, one of your most obvious priorities is to grow your business and make more money. As obvious as that goal is, though, knowing when and how to do so is much trickier than it seems. Be too ambitious and your business could crumble. But, be too cautious and you could find yourself stuck in a perpetual rut.
Often, business owners get too entangled worrying about day-to-day trivialities to focus on creating a sustainable growth strategy. By passing off the daily grind to either more employees or automation, you can instead turn your attention to making sure you scale your small business effectively. Here’s how.
Know When It’s Time
After years of barely keeping the ledger even, you are finally turning a profit. However, just because you have some extra cash in the bank doesn’t mean it’s time to move full steam ahead with scaling up your business. Here are some clear signs your business is ready to grow.
1. You Have to Turn Customers Away
As your customer base grows, your supply has to grow along with it. If you have come to the point that you don’t have the time, employees and/or resources to meet your customers’ or clients’ demands, it may be time to scale your small business effectively. Of course, having one busy day does not a pattern make. But if you are consistently turning down business opportunities, growth should be on the horizon.
2. You Have a Consistent Cash Flow
As we mentioned before, simply turning a profit isn’t enough to warrant scaling your business. You should have a steady and reasonably reliable cash flow before you consider expansion. This means understanding your business model and how well it’s actually performing. From that, you can forecast how well your company will grow under its current capacity, in addition to how much scaling up will help. Remember, work toward the best, but always plan for the worst.
3. You Have the Infrastructure to Grow
Your infrastructure includes a variety of aspects, including a proven product and loyal employees. If you have proof that you product or service is in steady demand, there’s a good chance being able to scale it profitably. Perhaps more important, you should have employees that are not only interested in seeing their paycheck, but are also interested in seeing the company succeed. With these factors in place, expansion is much more realistic.
4. Your Previous Goals Have Long Been Surpassed
When you started your business, there’s a good chance you weren’t quite sure exactly what goals you should set, since you didn’t have a lot of unique data to go on. As such, you may have looked at similar businesses to set your goals. If these goals are being consistently met or surpassed, it’s time to look toward a bigger future.
5. You Know the Risks Are Small for Scaling
Every business decision comes with some level of risk. But when you are considering scaling, there should be as little risk as possible. This means knowing the health of the industry, knowing the state of the economy and know your own business’s projections. If there is a decent risk that scaling up could have a negative impact, it may be better to wait for a more opportune time.
The Process of Scaling Your Business
When all of these factors have been taken into consideration, and your business is truly ready to scale, you can begin the process of growth. This should not be an overnight process by any means. Expansion should be slow and steady, lest you grow too fast. Follow these three simple steps to maintain healthy growth:
1. Create Processes and Automation
As we mentioned before, dealing with the day-to-day minor tasks can be a major hindrance to growth. As a business owner, you probably want to pass those tasks off to an employee, but without the right systems in place, doing so can be just as time-consuming. Having a good workflow program can eliminate much of this wasted time. For higher-level work like budgets and timesheets, automation through spreadsheets or more effective software can greatly reduce the amount of time you spend in front of the computer.
2. Invest in Customer Retention
Perhaps one of the biggest mistakes companies make when they are scaling up is letting existing customers fall by the wayside. It’s usually not intentional, but when the focus shifts to growth, the current customer base often gets forgotten about. But if you invest in customer retention through your expansion, the likelihood of gaining a greater market share drastically increases.
3. Hire the Right Employees
If you are in position for effective growth, there’s a good chance your employees are at their maximum capacity. Though putting another name on the payroll may seem like an unwanted dent in your budget, the truth is you will need more employees to scale your small business effectively. The trick is to find the employees who are just as worried as the company’s growth and success as they are about getting their weekly paycheck. Otherwise, they may not be as beneficial to your business as you may hope.
Scaling your small business is not a light undertaking. It requires extensive planning and preparation. But perhaps most importantly, it takes action. And we are ready to help.
At Company.com, we offer a variety of tools, such as team collaboration software and human resources management, to help you focus more on scaling and not the day-to-day minutia of work. Moreover, we can help you secure business funding to take that next big step confidently. Contact us today to learn more about how we can help you scale your small business effectively.