What does it mean to scale your business?
In building up a business, we must plan for the business’s expansion and success. Normally, you are already looking, planning, and hoping for the success of your business endeavor. But then, there is this reality: growth for growth’s sake, without considering business sustainability, could do more harm than good. This is where the practice of scaling business comes in. What is meant by scaling your business?
The difference between scaling and growing a business
Some use the terms “scaling” and “growing” in business interchangeably. In truth, they are quite different from each other. It is imperative to know the difference between scaling and growing a business to be able to effectively grow your enterprise.
Business growth means aiming for an increase in the business’s revenue and resources at the same pacing. Meanwhile, business scaling is a more efficient approach where the business aims for an increase in revenue while making sure that there are no significant uptakes in the use of resources as well. While it is true that we must begin with the end in mind – that is, the success of the business – the approach must be prudent. It is keeping your eyes on achieving the goals of the business while planting your feet firmly on the ground and being pragmatic with your business choices to ensure that you are making the best decisions.
How to know when it is the right time to scale your business
The key to scaling your business is timing. Certain indicators will help you determine when it is right for you to scale your business.
Is demand consistent?
One of the surest indicators that you are ready to scale your business is when you already see a pattern of consistency in the demand for your business’s product or service. You can already establish a baseline of production and have an assurance of income. Now we cannot really quantify consistency; you as the business owner should be on the lookout for the pattern and remember to exercise good business discernment sprinkled with a hint of caution.
Is your business profitable?
At this point, you will start seeing your business earn profits from its day-to-day operation. There is consistent demand, and there are positive reviews, raking in more customers and profits in the process. Now, two- or three-months’ worth of good sales does not mean the business is already profitable; we must consider other factors and be prudent.
Does the market support your growth?
Is your business already experiencing “positive” challenges, such as a deficit in inventory because there are just too many orders than you have projected? Conducting market research could help you get the pulse of your clientele, whether they would be supportive of the expansion or would appreciate an improvement in the meantime before trying to grow.
What do you need to scale your business?
Scaling your business could be a tough feat. Here are some items that you need to tick off in the list of requirements for business scaling:
Tools you may need to scale your business
There are lots of tools that you can take advantage of to help in scaling your business:
1. Customer relationship management (CRM) – this tool will help you administer your relationship with your clients. Maintaining the loyalty of existing customers and cultivating new ones both hinge on the crucial step of communicating with them. This tool will help you in your plan to scale your business.
2. Platforms for communication – the success of any endeavor lies in teamwork. Having an effective communication platform for the team would help ensure a clear line that each team member could use for brainstorming or even simply reaching out to speak to another member.
3. Automation tools – nowadays, we should strive to work smarter rather than harder. Automation tools can help take care of administrative, repetitive tasks to be able to focus on things that are more important for the business to thrive.
Knowing your customers
It is important to know the sentiment of your customers regarding the current state of your business and your planned scaling. It pays that your business stays in tune with the wants and, more importantly, the needs of your clients to stay relevant and maintain your niche.
Once you decide to scale your business, it is imperative to begin streamlining its processes. It is important to optimize it so that the business operation can progress smoothly. An operation manual should already be established to optimize the processes and serve as a guide to current employees and future ones when the business is at its expansion.
These are some of the basic things that you will need once you decide to scale your business. Having them will give you the boost that your business needs. The tools are there at your disposal, so make sure that you make the most out of them and have them work for the long-term success and scaling of your business.