Your startup has just landed a lucrative contract with a major client and, in order to meet the many requirements of this customer, you hire additional staff. However, the new revenue that you generate from this contract is being offset by the costs of delivering your services. On the one hand, it is correct to say that your company has grown; on the other, though, it has not scaled.
During the early days of your business, you might think that this is a terrific problem to endure, but a successful business can only sustain expansion by growing their revenues without taking on additional costs. This, essentially, is scalability – the ability to maintain productivity and performance while satisfying greater demands.
What's more, the concept of scaling a business has become even more relevant in today's economy. Because it is easier to acquire new customers and leverage technologies to expand into different markets, knowing how to improve your profit margins as sales volumes surge is crucial.
To help, we've compiled an in-depth guide on how to scale a business in a manageable and secure manner. Here's what you need to know:
1. List and Identify Your Milestones
Every startup should adopt a list of milestones for the first quarter or year, as it is an effective way of ensuring that you are staying on track. That's not all, though: milestones are an integral part of scaling your business, too. Without a series of goals to work towards, you could quickly lose sight of where you want to be in the coming months or years.
Moving forward, identify each phase of your projected growth and, in conjunction with your company's financial experts, link your expansion with capital. By instituting this tactic into your overall business strategy, you can budget out your future and provide yourself with enough time to calculate the dollars and cents accordingly.
2. Evaluate Your Structure
In today's marketplace, business models have become increasingly intricate, which can make it difficult to focus on the basics. However, a crucial element of scalability is to become acquainted with these fundamentals, and evaluating your company's internal structure facilitates this knowledge.
So how do you begin? Here are a few tips:
- Understand your limitations by identifying your resources.
- Learn about your most significant core users or customers.
- Confirm that your primary product or service line can satisfy the market.
- Locate the marketing channels that offer your most substantial returns on investment (ROI).
- Take an inventory of your personnel and identify their strengths and weaknesses.
Even if you do not intend to execute a startup scaleup, every business can benefit from a thorough evaluation.
3. Secure Your Sales
You are scaling your business because you are expected to sell more. But here's a question: do you have the infrastructure to not only meet these sales, but to also generate higher receipts? It is critical to secure your sales, a process that requires the following mechanisms:
- A functioning lead generation system and marketing platform to increase the number of leads
- A team of sales representatives to meet, follow up and close leads
- A comprehensive management system for your sales orders
- A robust billing system to ensure invoices are collected and organised
4. Invest in Automation
If you're not automating, then your expenditure costs are potentially higher than they need to be. Automation not only promises lower operational costs but also increased efficiency, thanks to minimal manual labour requirements. By automating your company's non-essential and tedious tasks, you can scale your company and lift your profits.
Unsure what you could automate? Here are a few suggestions:
- Customer service
- Payroll processing
- Automatic withdrawals
- Cloud storage and organisation
- Training regimens for new hires
- Digital marketing initiatives
- Customer relationship management
Of course, automation will require an upfront investment during the initial transition, and will also likely eat up a chunk of your time on the front end – but it will pay dividends further down the line.
5. Produce Content Marketing
As marketing guru Neil Patel puts it, “how can a business scale if no one knows about it?”
This is a good question and something that you will need to address with scalability in mind as, while marketing is a critical component of doing business, not all marketing types are effective and scalable.
Luckily, content marketing is. A form of marketing that involves content creation through blogs, social media posts and videos, it is designed to garner interest organically in your brand's products or services. It is a highly valuable form of digital marketing as it is evergreen and – with a little luck – can go viral at any time.
6. Hire the Right Employees
Your startup is only scalable when it has reliable, relevant and receptive employees. Because of this, it is essential that you only hire people that are suitable for their position and can offer something to the wider enterprise. Since, as a small business owner, you are likely not a human resources expert, you may wonder how you can determine this.
Here are a few pointers to taking on the right workers:
- Determine if they can complete tasks that a computer cannot.
- Find out if they have more than one skill.
- Pick their brains and see if they have good ideas that contribute to the startup.
- Learn about their office habits – are they just a body filling a chair?
- Ask about a complex problem they had to solve in their previous job.
For now, human capital is integral to the growth of private enterprises. Your employees are one of the most significant investments you will take on, so ensure you are making the right choices.
7. Outsource When You Need To
Similar to automation, outsourcing has acquired something of a negative reputation among consumers. Many people believe that it only involves shipping jobs – and even entire operations – to tax-haven jurisdictions or locations with low labour costs. But outsourcing can consist of merely tapping the services of a different firm – perhaps within your city or country – because it allows your personnel to concentrate on the bigger picture.
Whether it is answering telephone calls (an answering service) or processing payroll (a payroll processing service), you can ensure that your workers' time is being better-utilised on tasks that will grow the startup – not waste value.
8. Never Cut Corners
Many companies with ambitions of scaling make the mistake of trimming what they perceive as their fat. Entrepreneurs have the right intentions because they want to pad the bottom line with their newfound business. Unfortunately, though, the cutting of corners will eventually affect your product or service and become noticeable to your customer base. This is not the way to scale. As tempting as it is to push growth in this way, you will only diminish your brand's integrity, principles and reputation.
9. Stop Being Afraid to Ask
Are you weak if you ask for assistance? Not at all. It is time to erase this outlook from your mind. You will not grow and learn from your mistakes if you choose to refrain from asking for assistance.
As Steve Jobs explained in a 1994 interview: "I've never found anybody who didn't want to help me when I've asked them for help. Most people never pick up the phone and call; most people never ask. And that's what separates, sometimes, the people that do things from the people that just dream about them. You gotta act."
Whenever you are stuck, or you have a challenge that is difficult to overcome, then find the right person and ask. You will never scale your business successfully if you are unwilling to seek guidance and assistance, be it on a small technical issue or a wider strategic one. After all, it's impossible to know everything, and problems are more easily solved when exposed to different mindsets.
Essentially, scaling a business is about implementing processes that allow you to run not so much a tight ship – but an efficient one. A robust workflow and internal structure, effective capital budgeting and a consistent brand message all help to ensure that your company is achieving this. You also need to strike a delicate balance between brand enforcement and growth. Too many companies – large and small – lose sight of their initial mission and vision statements when they achieve even a modicum of success, making their original plans and strategies redundant.
Remember: Profitable, repeatable and scalable – these are the three critical ingredients for sustainability and success.
What other startup scaleup tips and advice would you give? Let us know your thoughts and opinions in the comment section below!