Congratulations on a successful business! Now, you’re up for a new challenge: how to scale your business for growth.
There’s more to scaling a small business than just looking for new ways to improve current business practices. It’s also enabling support for your company’s growth.
This requires planning, funding, the right team, technology and proper processes.
What does “scaling a business” mean?
Entrepreneurs often interchange “growing a business” and “scaling a business.” What’s the difference between the two?
Growing a business
- Expansion. Growing a business usually refers to an increase in its size, revenue, customer base or market presence. It can involve adding new products or services, entering new markets or increasing sales through various strategies.
- Incremental. Growth often happens incrementally, step by step, and might not fundamentally change the structure or operations of the business.
Scaling a business
- Expanding without proportional increase in resources. Scaling involves increasing revenue or market share significantly without a corresponding increase in resources or costs. It’s about finding ways to grow without simply adding more manpower, money or time.
- Efficiency and leverage. Scaling typically involves optimizing processes, leveraging technology or creating systems that allow the business to handle increased demand or growth without a linear increase in resources.
5 signs it’s time to scale up your business
When should you scale up the business? Some business owners take their time. After all, the odds of some small businesses’ survival aren’t good enough to “experiment” with, especially if scaling is in the cards.
But some signs signal the need for growth in terms of customers and revenue streams. Here are some things to watch out for.
1. There’s minimal risk
An important rule to keep in mind: scale up only when you’re ready.
Avoid creating unnecessary risk. Just because there are opportunities everywhere, it doesn’t mean you should scale up ASAP. While your profits are up and the team is trustworthy, you’re still prone to risks.
Risk is inherent in any business, but minimizing it is a priority before scaling up.
2. Repeatable sales and strong cash flow
Good profits aren’t enough to merit an expansion. While these are qualitative measures, the quantitative data representing profits can make or break a scaling decision.
These numbers can predict revenue, which matters just as much as the revenue itself. These data can also help predict future costs, stability and profits.
When you have a strong understanding of your business model and its track record, you can easily create a more accurate forecast.
3. Previous goals have been surpassed
If you’re surpassing your original goals, it’s time to evaluate your business’s potential for scaling. Instead of settling for current goals, challenge your business to reach another level.
Set goals that are more challenging but attainable so you can grow. Set high goals again and start expanding.
4. Turned down potential business opportunities
Success will positively impact your business’ capacity. During this time, you should expand your client networks and increase your baseline.
Eventually however, your workforce will be overwhelmed and start rejecting opportunities if you’re unprepared. If you’re starting to turn down clients due to a lack of inventory or manpower, prepare to scale up.
5. Good staffing
Proper staffing matters to small businesses. After all, employees are important to your foundation since they reflect your mission and vision.
You’re ready for a change when the team is ready. When they’re more proactive in their duties and have confidence in their abilities, you’re ready for the next step.
How to scale up your business
You know the signs, now here are the steps to help you prepare to scale up.
what you worked hard to build.
Evaluate your financial capability
Scaling up a business will need money. Are you ready for the costs that come with it?
Before you scale up, consider your current funding. Do you have enough incoming cash to cover the costs? If you don’t evaluate your finances first, you might end up spending more than you earn, which can cause financial concerns for your business.
Have a clear growth strategy
What’s your next move?
A strategy dictates the future steps you take with each business move. Most entrepreneurs use a business map, which is a comprehensive and effective way to scale the business and hit targets.
The map also prompts small business owners to ask important questions like “What are your motivations?” and “What type of business do you have?”
This strategy challenges you to define your purpose and look ahead. Documenting your goals offers a helpful reference when times get difficult.
Build a strong team and expand it accordingly
As you prepare your team to scale up, determine the skills required to meet the business goals and identify potential skills gaps. Soft and hard skills are essential in team development.
Soft skills are self-developed traits that help a team member work well with others and lead by example. Hard skills, on the other hand, focus on measurable and technical competencies gained through experience and education.
Leverage and invest in technology
Most business days are spent on manual administrative tasks. While these are essential, they’re also time-consuming.
Be more productive by using the right technology that can automate some critical tasks. Automation will free up more time for your team to focus on broader business goals.
Invest in technology that will automate the following processes:
- Payroll and accounting
- Team member onboarding
- Appointment schedule
- Project management
- Customer relationship management
Develop your management skills
Managers are responsible for motivating the team to achieve its goals, as well as holding the team accountable for their responsibilities.
Your managers should possess the right skills to drive results. These skills include:
- Leadership
- Critical thinking
- Time management
- Strategic planning
to work toward your business goals.
Increase your sales
Your strategy may involve growing your average revenue or adding new customers. But while both guarantee more sales, prioritize improving your relationship with the current customers.
Scaling a small business requires brainstorming ways to increase sales while increasing profit without using more resources. The best practices include the following:
- Developing an effective marketing plan
- Zoning in on the target market
- Addressing customer concerns and feedback
- Refining your branding and messaging
Stay adaptable
Change is inevitable, especially in the fast-paced digital economy. If you can’t keep up with the latest trends, you will lag behind.
Always be open to change – this is a rule of thumb when scaling your business. Stay on top of the changes in your industry and be willing to adjust.
The right partner for scaling your business
Scaling a business is no walk in the park, which is why it pays to have a trusted logistics partner to help you achieve your goals.
Ninja Van offers end-to-end logistics and optimized solutions to help you:
- Scale up faster
- Streamline your operations
- Save on costs
Work with an experienced team with a strong network in SEA and China: from sourcing and procurement to fulfillment and warehousing, to fast and secure express delivery, and more customized services that help businesses of all sizes.
Ninja Van is your partner for growth! Find out what Ninja Van can do for your business.
More tips to help your business scale up:
How 3PLs Help Your Ecommerce Business Grow
Shipping from China to the Philippines: An Easy Guide
The Benefits of Postpaid Shipping for E-commerce
