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Scaling A Business: Three Target Areas To Look At
March 09, 2020

Scaling A Business: Three Target Areas To Look At

If you run a small business, then your primary goal is likely to continue to ensure your business grows. However, one of the key components that many entrepreneurs don’t realize is that growth isn’t the same thing as scaling. You can grow your business, earn new customers, and expand your market share without scaling your company. That’s because as they continue to boost their revenue, many businesses will see expenses increase accordingly. In comparison, when you scale, you’re able to meet the additional customer demand without increasing your spending.

That’s why companies that scale can 10X their customers with the resources they already have in place. This article will explain what scaling is and some target areas you should evaluate before scaling a business.

Why Scale?

If you’re in a period of rapid growth, then you may be quickly acquiring new customers and generating additional revenue. As a result, you’ll have to adjust your current systems and team to accommodate this new wave of business.

The problem is, your business will eventually reach a point where it’s at capacity. Your current infrastructure can’t support all the new customers you’re earning. When that happens, the quality of your work can suffer and your churn rate might increase.

When you scale, you increase your business’ capacity to serve customers and perform under an increasingly demanding workload. By utilizing technology and workflows, you can increase your revenue without massively increasing your production costs.

Scaling allows your business to operate more efficiently even as you’re growing your revenue. And you continue to earn more than you’re spending to get new customers into your business.

Here are some of the biggest signs that it may be time to scale your business:

  • Your leads spiked without any additional spending on marketing
  • Customer demand is exceeding your current capacity
  • You can delegate more mundane tasks in your business
  • You have the right processes in place
  • You have the infrastructure in place
  • You have a repeatable sales funnel

How To Scale A Business: Check These Target Areas

Before you learn how to scale a business, you must make sure you get the timing right. By scaling too early, your team members could become overwhelmed and your business won’t be able to handle the additional workload.

Still, if you wait too long, you may miss out on opportunities. So how can you scale a business in a way that’s sustainable long-term? Let’s review three key areas you need to look at when preparing to scale your business.

Internal Business Processes

A process is a series of steps you take to achieve a desired end result. And whether they realize it or not, most people have processes in place for nearly every task they complete.

The problem is, most people’s processes are inefficient and time-consuming. And occasionally, these processes create more problems than they solve.

That’s why your goal as a business owner should be to continually improve and refine your processes. In addition, improving your processes is what’s going to free up your time and allow your business to eventually scale.

The best way to improve your processes is by thinking of the steps that go into delivering your product or service to the customer. Who’s involved in this process, and what do they do at each point?

Starting documenting the various processes that take place in your business. From there, you’ll find ways you can improve and streamline these systems.

Your Business Organization

Before you begin, you need to consider your current business. Namely, do you have a proven business model? Is the demand for your product or service increasing? Do you have solid cash flow and predictable monthly sales?

Even if you have the financial pieces in place, you still need to consider whether you have the team in place to scale. Are there any new roles that you need to fill, and which ones are the most crucial? Do you need to hire more full-time staff, or could certain jobs be handled by a freelancer?

Also, you should make sure that your current team is ready. When a business is trying to scale, it can put everyone in the company under a lot of additional pressure.

Make sure you regularly check in with your team and see how they’re handling the business growth and their increased responsibilities. This will help you avoid losing talented employees to burnout and stress.

IT Infrastructure and Architecture

It’s important to have the right technology and infrastructure in place before you attempt to scale. The right infrastructure will allow you to let go of repetitive, low-value tasks and focus on the things that will bring the most value to your business.

Before scaling, you should look for ways to automate or outsource activities in your business. Fortunately, technology makes scaling your business easier and less expensive.

Having the right infrastructure in place will allow you to scale with less friction because each step will build on each other. For instance, your operational tools should eliminate any bottlenecks, allowing your employees to do their best work. This allows your business to operate without you needing to constantly step in and fix things.

Final Tips on Scaling

Scaling is an important milestone for any company. When you scale, you substantially increase your revenue without increasing your costs at the same rate. Your business operates more efficiently and you earn more for every sale you make.

It’s important to wait to scale until your business is ready. Trying to do it too early or too late can have negative consequences for your customers, your team, and your business.

It’s not always immediately apparent whether your business is ready to scale. By evaluating your systems, your team, and your infrastructure, you should be able to determine if your business is ready for this next step.

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Frequently Asked Questions

What does it mean to scale a business?

When you scale your business, you exponentially increase your customers and revenue without increasing your spending at the same rate. Instead, your current systems and infrastructure are able to accommodate the additional work.

This allows your business to operate more efficiently and earn more money per customer. That’s why having a business plan and putting the right processes in place are a crucial part of successfully scaling any business.

Why scale your business?

Growth and scaling aren’t the same things. That means your business can continue to make more money even if you’re not actively trying to scale. And for some business owners, this can be the right strategy for a period of time.

However, at some point, you’re going to reach your capacity. You’ll come to a point where your current systems and the team can’t handle all the work that’s on your plate.

This can cause you to miss out on opportunities, and if your work suffers, it could lead to higher rates of customer churn. That’s why it’s important to recognize the signs of when it’s time to scale.

What are the signs your business is ready to scale?

Before you start thinking about how to scale, you need to consider whether your business is ready for this step. Scaling too soon and waiting too long to scale can each have negative consequences for your business.

Here are some of the biggest signs that it may be time to scale your business:

  • Your leads spiked without any additional spending on marketing
  • Customer demand is exceeding your current capacity
  • You’re able to delegate many of the more mundane tasks in your business
  • You have the right systems and processes in place
  • You have the infrastructure in place to scale
  • You have a repeatable sales model
What should you consider before scaling?

Here are three things you should consider before attempting to scale your business:

  1. Your internal business processes:

Your processes are the steps taken every time a task is completed in your business. You likely have processes in place for onboarding employees, handling customer complaints, and handling invoices.

Many businesses have processes that are inefficient and time-consuming. Before you scale, you need to review your current processes. Are there any improvements you can make that would allow your business to operate more efficiently?

If you haven’t already, begin documenting your processes for added visibility. This will show you ways you can streamline and improve them going forward.

  1. Your business organization:

Is your business financially in a place to scale? Do you have a proven business model and predictable monthly sales? Do you have a repeatable sales process?

Even if you have the financial pieces in place, you should look at your current team and evaluate whether they can handle the additional workload. Are there any additional positions you need to hire for?

  1. Your infrastructure:

Having the right infrastructure in place is a key part of scaling your business. It’ll allow you to scale quickly and with less friction.

It also allows you to let go of low-value tasks and focus on the things that will bring the most value to your business. Before scaling your startup or long-time business, you should look for ways to behind automating or outsourcing activities in your business.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].