Scaling up your Business: The Ultimate Guide

Last updated 12/29/2018

Scale up your business

The time has come, the Walrus said, to talk of many things…

Well, alright, perhaps not many things. But the fact you’ve found yourself here means that you’re more than casually interested in the potential to scale your business. But what does that really mean? And how do you know if you’re in the right place for it?

The concept of “scaling your business” can actually have different meanings, dependent on the context that its used in. Most commonly, when talking about scaling a business’ operations, we’re talking about the potential to take on an increased amount of work or sales, in a way that doesn’t involve over stretching your finances or resources.

There is a difference between scaling and growth, however, and we’ll cover that, as well as giving you some information on the potential drawbacks and challenges to scaling your business, and a guide to know when you might find yourself ready to scale your operations.

Are you ready? Then we’ll begin.

What Does Scaling Your Business Actually Mean?

While some people may use the terms “scale” and “growth” interchangeably, let’s start with the distinction between the two. To do so, let’s delve into a theoretical business world.

Imagine you’re a website designing company who has signed on a new client. This new client has brought in a new revenue stream, but you don’t quite have the resources to be able to handle them. So, you hire a new member of staff to help you take on the workload, which allows you to handle the workload, but increases your outputs.

This is growth without scale. Although your company increased the amount of money that it’s making, the sale increased the amount of time and effort that you needed to spend on fulfilling the job. If this is how your company is growing - each sale requires the same amount of investment as the previous one - then your business model isn’t scalable.

Instead, imagine you’re a website designing company who has created a new template. The template retails at $200, and every time somebody downloads the template, you make $200. While the first customer who buys the template may simply cover the cost of the time spent making the template, by the tenth customer you are making a comfortable profit without having to spend any more time or money on the project. This is scalability.

At its core, a business can be scaled when you can deal with more work while either keeping a steady level of efficiency, or increasing it. We’ll cover predictors in more detail later on, but great ways to indicate whether or not your business model can be scaled are:

  • Having a regular, predictable revenue

  • Offering subscription-based services

  • Plural revenue streams

  • Great customer retention

  • A value ladder of products

How to Scale your Business

As the aim with scaling your business is to increase your revenue at a better rate than you increase your expenses, then the best way to scale your business comes from looking at which aspects of your business can be repeated in a fast and cost-effective way.

Not everybody is going to be able to get into the mindset of scaling, but at a certain point it becomes vital to consider. Particularly when your company is growing at a rate that involves too many things happening at the same time, and balls being dropped. While scaling your business can seem like a daunting prospect, in a lot of ways it can make your work life much easier.

The idea of growth is something which has probably crossed your mind, a time or a hundred. However, a lot of business people and entrepreneurs find it challenging to consider growth beyond a certain point - particularly when in the early startup phase. Scaling your business is something which requires a developed and well-considered plan of action, and workable steps as to how it is that you’ll achieve your goals.

Automate the Process

While all businesses understand the importance of structure workflows, it becomes all the more vital when looking at scaling your business. The challenge for a lot of people will be in considering the ways and means of automating their system. As you start to scale your business, you might find yourself in a place where you’re struggling to support the new demand with your existing framework. This can lead to workplace tension, missed deadlines, or failed opportunities at executing excellent customer service.

This is where BPM software such as Wokflow can give you a great bird’s eye view of every process that your business goes through. BPM - or Business Process Management - Software gives you a higher level view of what is being done in your organization, and allows you to see how the process can be improved. Where great BPM software comes into its own is that it gives you the opportunity to get reports and see how the workflows come together.

Automation is a vital component of scaling your business, and can be tricky for people to step back enough to see how the system is working for them. Once you can see how well your organization is working, you increase the likelihood of being able to repeat the process many many times. It also acts as a permanent record - allowing you and your staff to see at a glance how the systems are unfolding, and understanding each person’s role in the system.

Know Your Niche

It’s vital to understand why it is that people come to you and your company, instead of going to your competitors. What sets you apart in their eyes? Utilize customer feedback to get an understanding of what it is that your company is about from the consumer end - this can be an eye-opening experience for some business owners, who can sometimes be surprised at the core strengths of their company.

This will also indicate the things that your company does very well, and the areas where you might be feeling a little bit challenged. This is an important route to understanding which areas of the company have the potential to be scaled, and which parts aren’t ready yet.

Daily Tasks vs Key Activities

When looking at scaling up your business, your focus may now start to feel split. Of course you have to understand and pay attention to the daily tasks as they are being performed, and in achieving the goals your company has set out to achieve.

However you also have to start honing in on the key activities which will allow your company the potential to scale. It’s important not to lose sight of the fact that you are implementing a new set of systems, so don’t lose yourself in the daily grind.

In fact, it can help to keep in mind the mantra that you should be working ON your business, rather than working in it. If you’re to truly enjoy scalability, make sure you have the right people hired to handle your day to day processes, leaving you free to focus on the future.

What You Know AND Who You Know

According to Ernst & Young, you can ”catalyze your companies’ growth by building and fostering critical relationships.” Essentially, scaling your business isn’t just about what you know and what you know how to do, it’s to do with who you know.

Networking is a vital component of scaling your business. Businesses these days operate on a person to person level, and so it’s important to get out there as your startup’s leader, and make sure that people know who you are, and what your business is about.

Challenges to Scaling your business

Scaling a business is an important part of growth, but it’s easy to make mistakes. So how do you know whether or not you should be scaling your business? You think you’re certain, but make sure you’ve honestly and openly considered the challenges listed below before you do anything.

Don’t Start Too Soon

You don’t know your customers.

Your process isn’t perfect but it’ll “work itself out”.

You don’t know your market.

If any of these thoughts seem familiar than stop, do not pass Go!, do not collect $200. According to the StartupGenom’s survey of 3200+ startups, 74% of failures can be explained by premature scaling, and these can be some pretty good indicators that you’re going into scaling your business with the wrong mentality.

It’s vital to make sure that you are doing your due diligence by your company, and making sure that you have figured out the root of these problems. Perfecting the product and execution before you consider scaling will save you a lot of heartbreak and wasted resources in the long term.

Making Sure You Have The Right People

From knowing your suppliers to your staff and investors, as a founder it’s vital that you consider whether the team you have right now is necessarily going to be the team you work with in the future.

This is where it’s vital to ensure that you have your bigger picture plan worked out - you want to make sure that you’re developing long-term working relationships with people who will be able to help you in a volatile stage of your company’s development, and are willing, eager, and dependable.

Experience is always going to be a desirable trait, particularly when it comes to people who have gone through scaling businesses beforehand, but in the end nothing will beat having a team who fully represent the goals and ideals of your company. Starting before you have a strong team is a recipe for disaster.

Distracted by Sales not Long Term Demand

It’s vital to consider the difference between short-term tactics and long-term lasting impact. While strong sales and impressive marketing are vital for a business to succeed, they aren’t necessarily a guarantee that your company will effectively scale.

This is where you want to look at creating and developing a strong buyer market so that there is long-term demand for your product. You don’t want to find yourself in a situation where you have a business that is ready to scale, with a system in place to do it, but no customers to invest.

Undercutting Yourself

Offering a competitively priced product is vital, however you might start to think that as you’re increasing your production, you can consider cutting your costs - effectively undercutting yourself. In fact, it’s more consistently found that competing on price leads to a “race to the bottom”, where you cannot afford to sustain the business model you’ve created.

It’s far better to compete on quality, ingenuity and customer service than to position yourself as your industry’s low-cost provider. In fact, the millennial market now are more likely to invest in a brand they align with, rather than one offering the cheapest product, so you might not be doing yourself any favors in either the long or short term by cutting your prices too much.

Changing Management Structures

Agile, adaptable leadership is vital when it comes to scaling a company. As growth is often integral to scaling a company, you may find that you need to rethink the way in which you manage and lead your company. What worked for ten employees may not work with 100.

Be prepared to consider changes in hierarchies or leadership styles - openness to this means that you can be prepared if the need arises.

Ignoring Problems

A startup that is growing is an exciting place to be, and often takes people out of their comfort zones. However, that doesn’t mean that it’s okay to ignore problems as they’re happening. In fact, by doing so you could actively be limiting your process.

Rather than forging ahead by brushing issues under the carpet, be open to the challenges and problems that may occur. Putting systems in place to troubleshoot will only benefit you in the long term.

Scale Isn’t All Growth

Many people think that scale is about just getting bigger and bigger, without considering the need to trim some of the extras. As your company grows, you might find that there are areas where you’ve invested previously that are no longer effective, or staff members who no longer fit the bigger picture.

This is where the BPM software can help you continue to refine your process. By getting an overview of what is working well - and what isn’t - you can be prepared to make the tough choices for scaling your business.

How do you know if you’re ready to scale?

So, having taken all of these things into consideration, are you still wondering if your company might be ready to scale up? Obviously, as with anything in business, there isn’t one way to know whether or not your business is ready for this, but if you have more than one of these signals, it might be time for you to confidently consider scaling up.

Saying No

It’s natural in the beginning of a startup’s life to accept every client that wants to work with you. However, your business’ capacity is the most common-sense way to understand whether or not you’re ready to scale up.

Are you having to say no to customers because of a lack of time, product, or ability to satisfy the demands of your existing clients and new ones? Then you could definitely be ready to scale up. If you’ve found that an increasing number of people are showing interest with intent in what your business is offering, then it’s a great sign that you should start examining your processes and setting new goals for the next phase of your business.

Maxing Goals

Every company has to have goals and targets, and it’s an important way to allow you to forecast and business plan for the future. While a lot of startups don’t have enough data to fully business predict, borrowed statistics can allow you to estimate the stage your company is at.

If you find yourself surpassing your goals while maintaining your standards, it may definitely be time to consider scaling up. Goals should be a challenge - not unrealistically so - so if you find yourself in a place where you’re setting higher and higher goals, then it may be time to consider expanding.

Repeatable Sales AND Repeatable Results

To go back to the difference between growth, and scale, simply making money isn’t enough of a justification to consider scaling up. However, looking at the numbers is a useful way to consider whether or not you’re ready to look at scaling.

It’s paramount to have a strong understanding of your business model and your business’ performance, and looking at your forecasts for both best and worst case scenarios is a great way to see whether or not you’re ready to scale. A narrow difference between the ratio of best and worst results indicates that you’ve got a healthy customer base and are making enough repeatable sales to consider scaling.

Concept and Infrastructure

We are what we do repeatedly, and before you look at growth and scale, it’s important to know what it is that your product or service does, and then whether or not you have the infrastructure to support repeating it.

Firstly, look at your product or service and make sure that you know not just what it is that you’re selling, but why it is that it sells. Does it satisfy a need? Does it ease a customer’s pain point in a specific, actionable way? Understanding the concept of your business, and having a clearly defined mission statement is essential when looking at scaling.

It’s also integral for ensuring that your team are ready to offer the infrastructure and framework to support growth. Mostly you’ll know whether or not your team is ready to handle the challenges of scaling up by their attitude. You’ll be able to see that your team are committed and invested in the success of the company. If you have employees who see that their work is about more than their job, and are actively investing in the future of the company, you’re in a great place to start exploring scale.

Of course, when to comes to scaling up your business, there are no hard and fast rules as to when you should do so. Fundamentally, it comes down to scaling up only if and when you are ready to. It’s vital to consider minimizing the amount of risk your company faces when going through the growing pains of scaling up, and it’s important to do so with a clear conception of your product and service, and the team that you have executing the business’ daily efforts.

If you’re ready to start the necessary overview of your business, and to see if you might be ready to consider scaling up, then for your first steps you should definitely consider Wokflow. As a BPM tool, Wokflow allows you to track and organize your teams and workflows, so that you can see who Is working on what, and how effectively it is working. It allows you to be able to see your business processes, which can then help you when it comes to considering your company’s scalability.

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