What does scaling mean for a business? Essentially, it’s about increasing revenue and profits at a faster rate while minimizing new expenditures. Scaling your business at a sustainable pace, however, can be challenging. If done improperly, you could end up increasing costs and creating more operational inefficiencies that slow down growth. Here’s what to know about effectively scaling your business:
Find the Capital
Scaling is the right step for entrepreneurs, but it’s costly. You’ll have to find the money to fund an expansion project. You can always bootstrap your way into scaling a business, but this method takes plenty of time and effort. Alternatively, there are small business contests that you can join that award sizable cash prizes. If you have a compelling story to share, these contests may be one way to secure the capital. Otherwise, you may need to seek out venture capitalists.
Milestones are essential, as they tell you whether or not your new efforts are growing or harming the company. Specify a milestone you want to reach and allocate a portion of your budget to it. For instance, you could assign $5,000 towards a new product line that you think would complement your existing products well. Or, you could put $500 towards a new marketing channel that may be able to target your audience better.
Invest in Tech
A reliable tech infrastructure equates to business scalability. It makes the transition easier and cheaper by requiring less labor while producing higher throughput. Find areas of your business that can be automated, whether it’s the checkout process, inventory monitoring, and management, or fulfillment and distribution.
Find the Right People
Your labor force will generally increase when you start scaling your business, such as new customer service employees to handle increasing phone traffic. Conduct some market research on industry benchmarks to identify the best ratio of customer service reps to customers. Look at other vital departments, such as manufacturing, HR, and management, and see if you have enough people staffing those areas.
Scaling your business requires knowing how much you need to execute, setting the right milestones, automating as much of your business as you can, and finding the right people to help you grow faster.