Scaling your business requires you to build capacity for growth in your team, budget, and operations. Scaling can be complicated, but taking a methodical approach allows you to meet customer needs while supporting internal growth.
We've developed these 7 steps to help you prepare your business for long-term success during and after expansion.
How Do You Know When It's Time to Scale Your Business?
These are the most common signs that your company has grown enough to start scaling:
- Your current team can't handle the workload. You need more employees to serve your customers effectively.
- You're spending a significant amount of time on areas outside your core responsibilities and objectives. In response, you're considering outsourcing functions like marketing and IT.
- You have the financial resources to expand operations. For example, your budget can support a new location, larger staff, and higher overhead costs.
- You've strategically considered expansion opportunities and decided how to best scale your business. Your growth plans should align with your company's overall goals.
- You have the time to spend on scaling your business. You'll be able to work longer hours during growth periods without compromising your well-being.
- You're always sold out of your products and customers are constantly asking when you'll restock their favorite items.
- You can't keep up with orders. You're noticing an increase in complaints related to delayed shipping, customer support response, and other aspects of fulfillment.
- You're successfully exceeding your short-term business goals but struggle to work toward long-term sustainability.
When these scenarios sound familiar, it's time to initiate your scaling strategy.
7 Steps to Scale Your Business
1. Create Standard Systems
Having standard processes in place makes it easier to scale your business when the time comes. It also improves efficiency since you don't have to reinvent the wheel for things you do over and over. For example, if you develop an employee handbook and onboarding process, you'll know exactly what steps to follow each time you bring someone new on board.
If you haven't already documented your company's standard operating procedures, ask each department to write down the steps for repeated tasks. Start by systematizing simple routines, then apply the same approach to break down and document more complex operational processes.
You should also take this opportunity to figure out what works and what doesn't from an operations perspective. Optimize your systems before you scale rather than replicating a problematic process.
2. Grow Your Team
When you're ready to start expanding, think strategically about which positions you need to support your scaling plan. Consider hiring full-time team members for critical but time-consuming functions like marketing, sales, customer service, or product development.
In addition to hiring new staff, partnering with vendors and service providers also builds capacity. For example, you may want to outsource compliance, IT, accounting, or another area outside your core business functions. Working with freelancers is a smart way to start scaling if you can't afford to bring employees onboard yet.
As you add employees, it's important to create a mix of hard and soft skills at all levels. Cultivate a culture of leadership by hiring driven, innovative talent and encouraging creativity and performance.
Attributes to look for include change management, time management, strategic planning, and critical thinking. It also makes sense to hire for high performance. Individuals who consistently exceed the benchmark for success are about 400% more productive than the average employee. This figure increases to 800% for the most complex roles.
3. Invest in Automation
You can also build capacity by automating manual tasks that cost time and money. Using technology for these processes allows your team and leaders to focus on strategic objectives and priority actions.
If automation seems like a big leap, start small with just one time-consuming function. Now that you have standard systems in place for your most frequent repeat operations, you can use those instructions to automate areas that make sense for your business.
Some of the most common areas for automation include scheduling meetings and appointments, managing projects, keeping track of customer relationships, running payroll and accounting functions, and onboarding new staff members.
You can take advantage of automation even if you're operating on a lean budget. Steps as simple as using commands to send emails to specific folders or pull spreadsheet information into charts can free up a surprising amount of time and money, especially if your team consists of just a few people.
4. Explore External Funding
If you plan to look for outside funding, you'll need to develop a pitch to use with potential investors. Your materials should highlight your company's unique value proposition and provide several years of detailed financial information.
In addition to courting investors, you may also want to apply for working capital in the form of business loans or lines of credit. Crowdfunding platforms can also provide a source of financial support as your company scales.
Set budget milestones for each step of your scaling plan. When you set a financial goal for each stage of growth, add a cushion of about 10 to 30%.
5. Work on the Core Scaling Capacities
Researchers with McKinsey identified 7 core dimensions that predict a company's ability to successfully scale. Focusing on these areas builds the capacity you need to overcome the most challenging growth hurdles:
- Governance, including organizational structure and relationships with partners and investors
- Access to capital, a category that includes a well-developed business proposition, an optimized pricing strategy, and a systematized finance and accounting department
- Solid operations, including a defined model to deliver valuable solutions to your target market
- The right team, an established hiring strategy, and a system to manage employee performance and talent
- Comprehensive investment in technology that covers security, the ability to derive insights from your data, and systems architecture that fits your operational needs
- A marketing strategy that attracts people to purchase your product or service, including a customer relationship management system, a recognizable brand, and a lead generation funnel for the B2B or B2C sectors
- Product strategy that accounts for customer insights, plans for expansion, and techniques to drive engagement and adoption
You should strive for solid performance in each of these areas as your company grows to build the foundation you'll need to successfully scale.
6. Learn From Your Best Customers
Creating a feedback loop with your audience gives invaluable insight about how you can improve your offerings based on their needs. Ideally, you'll want to develop a strong relationship with a group of loyal customers who give you honest feedback and refer their friends and colleagues to your business. Communicating with them regularly provides the information you need to drive organic growth.
Think of the pre-scaling stage as a chance to perfect your offerings. You can take a lab approach where you test new things and see how the market responds. In the process, you're positioning yourself as a client-centered brand, a surefire way to keep customers happy and engaged.
7. Set the Stage for Stronger Sales
Expanding successfully requires customers to buy more from your brand. You can increase revenue by strengthening sales before you grow. Signs that you're ready to scale from a sales perspective include:
- A content management system so you can document touchpoints, leads, and marketing initiatives
- An intuitive back-end order and inventory management system
- A steady supply of good leads
- The sales staff you need to serve a higher customer volume
- Standard processes for billing and receivables
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The Bottom Line
Scaling your business effectively creates the capacity you need for sustainable growth. When you have a strong strategy in place, you can apply the same steps each time you're ready to expand to a new level. You'll also have defined objectives to help keep expansion within scope, an important aspect of successful scaling strategy.
Pay.com gives you a full-service payment infrastructure that can scale with your business. You'll impress your users with a seamless checkout process, creating the revenue and loyal customer base you need for growth.