So you’ve made the decision to grow your business – congratulations! Now get ready for the next challenge: how to scale your business for growth. Even if you manage to sell like crazy, you’ll soon have another problem: you have to be able to deliver to all those new customers.
Scalability is about capacity and capability. Does your business have the capacity to grow? Will your business systems, infrastructure, and team be able to accommodate growth?
If growth causes your company to stumble because of confusion, orders falling through the cracks, insufficient staff, miscommunication, or not enough manufacturing or delivery capacity –you’re going to have unhappy customers. The manual processes that were fine when you were small but now won’t let you move fast enough. You’ll either be putting out fires or desperately trying to keep your head above water. All of which are stressful.
Scaling a business means setting the stage to enable and support growth in your company. It means having the ability to grow without being hampered. It requires planning, some funding, and the right systems, staff, processes, technology, and partners.
Scaling a business can be an exciting yet challenging time As your company grows, things that used to be easy become more complex. Processes that worked perfectly for a small startup may now be outdated and inefficient. However, with careful planning and execution, scaling your business the right way can lead to dramatically increased profits and impact.
In this comprehensive guide, we’ll cover the key steps involved in effectively scaling up your operations for sustainable, long-term growth.
Create and Follow a Scaling Plan
The first critical step is to create a detailed scaling plan that covers every aspect of your business This should include things like
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Financial projections and targets – Set clear goals for revenue, profit, cash flow, etc. Consider hiring a financial advisor to help with projections.
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Marketing and sales strategies – How will you acquire new customers? What channels and campaigns work best?
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Operational processes – Map out procedures for fulfillment, customer service, HR, etc. Look for ways to improve efficiency.
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Infrastructure needs – Outline requirements for real estate, equipment, software, HR, etc.
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Funding/financing – Calculate how much capital you need to support scaling activities.
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Benchmarks and timelines – Establish measurable targets and milestones for tracking progress.
Once your plan is created, follow it closely and review it regularly. Be prepared to make changes if certain aspects underperform. Having a solid scaling plan is key to minimizing growing pains.
Maintain Focus as You Scale
It’s tempting to want to expand into new markets, products, and opportunities as you grow. However, maintaining focus is vital, especially in the early stages of scaling.
Stay laser-focused on the core parts of your business that are working well. Only consider new products or markets once you’ve mastered scaling your core offerings. Spreading yourself too thin trying to scale multiple areas at once can be dangerous.
You also want to stay focused on providing excellent service and value to existing customers. Don’t let scaling distract you from the fundamentals, like product quality and customer satisfaction, that got you here. Keep your eye on what matters most.
Document Your Processes
Carefully documenting all your business processes is essential for smooth scaling. As you bring on new employees or team members, documented processes allow them to get up to speed much faster.
Create process documentation, manuals, checklists, and training programs to ensure operations stay consistent even with new people added to the mix. Well-defined processes will also help you identify areas needing improvement.
Using tools like workflow diagram software can help map and visualize processes and pinpoint optimization opportunities. Documenting institutional knowledge is vital for efficiently training staff.
Have Solid Marketing and Lead Generation
Scaling successfully requires filling your sales pipeline with qualified leads and prospects. If marketing and lead generation efforts aren’t planned and executed well, your growth will soon stagnate.
Analyze the sales process to determine exactly what kinds of leads convert best. Build marketing campaigns that target your ideal customers. Diversify lead generation across multiple strategies like content marketing, SEO, email, social media, and paid ads.
Consider hiring a marketing specialist if needed. Plan lead gen and sales activities well in advance and budget adequately for marketing. Strong promotion and lead gen should be priorities.
Be Frugal and Save up Cash
One common scaling mistake is splurging on expenditures too fast before having the revenue and cash flow to support it. Preserve capital by maintaining thriftiness as you scale. Don’t overspend on flashy offices or other unnecessary expenses.
Save up cash reserves to handle emergencies and revenue fluctuations. Understand your exact cash burn rate and how long your runway is. Carefully watch for burnout signals. Pursue creative options like revenue-sharing partnerships to conserve capital.
Maintaining contigency funds, healthy cash reserves, and good capital discipline early on will give you greater stability and flexibility for ramping up spending when the time is right. Don’t squander your balance sheet.
Partner With Financial Professionals
As mentioned earlier, a key part of your scaling plan should involve partnering with financial professionals. The input of accountants, financial advisors, lawyers, and bankers can be invaluable.
Hiring an experienced accountant or CFO can help optimize financial strategy and modeling as you scale. Establishing relationships with banks and external financing partners will give you growth capital when needed.
Lawyers can offer guidance on legal issues like trademarks, patents, compliance, and human resources. Financial advisors analyze your business model to pinpoint the best areas for investment and growth.
Don’t try to handle complex finance challenges alone. Leverage the expertise of financial professionals to scale smarter.
Invest in Yourself as a Leader
Leading an exponentially larger organization requires different skills and mindsets. Invest time and money into developing yourself accordingly.
Hire an executive coach to get unbiased feedback and advice. Take business management courses to acquire new capabilities. Read books and listen to podcasts from other founders who have successfully scaled.
Push yourself out of your comfort zone to gain skills for overseeing a larger operation. Surround yourself with mentors and advisors who can guide you through uncharted territory.
Putting in the work to grow as a leader will pay huge dividends as your startup begins rapidly adding staff and complexity. Think long-term.
Hire Strategically
Ballooning your employee headcount without care can bloat overhead costs and tank productivity. Hire strategically and only when truly needed.
Outsource roles like IT, marketing, and HR initially before bringing them in-house. Be selective in evaluating candidates to get A-players. Incentivize referrals to find great hires through networks.
Standardize the interview process and make data-driven hiring decisions. Hold out for ideal candidates rather than rushing to fill roles. Onboard new hires thoroughly to align them with processes.
Hiring the right people is one of the most important investments for scaling successfully. Prioritize cultural fit and trainability over pure qualifications. Move slowly but surely.
Maintain Culture and Values
Rapid growth can dilute the cultural elements that make your company special. Preserve your ideals by integrating them into all scaling plans and activities.
Celebrate wins and milestones frequently to unite teams around shared mission and purpose. Foster open communication and transparency across the company. Make values central in hiring.
Leading with compassion and integrity becomes even more important with scale. Keep culture front and center through regular touchpoints like all-hands meetings, off-sites, and events.
By embedding your core values into every function, you can scale exponentially while retaining close-knit cultural identity. This boosts morale, retention, and customer satisfaction.
Take Time to Celebrate Wins
The scaling process can be grueling and all-consuming. That’s why it’s crucial to celebrate successes and milestones along the way to maintaining motivation.
Build in regular recognition moments after launching a new product line, opening a new office, hitting revenue goals, etc. Individual and team shoutouts also recognize contributions that help achieve scale.
Keep energy and spirits high by showing appreciation for hard work. Share inspirational scaling stories from inside and outside your company. Make time for non-work connections and fun.
Scaling a business is a marathon, not a sprint. Recognize progress made toward larger goals to keep your team refreshed and engaged for the long-haul.
Start Delegating Tasks
The more you scale, the less you can afford to get bogged down in day-to-day minutiae. You need to be thinking long-term strategy.
Start transitioning focused responsibilities to other managers and staff you trust. Delegate wisely to empower others while freeing up mental space for big-picture planning.
Of course, stay involved in key decisions and provide helpful oversight. But micromanaging daily tactics as you expand will burn you out fast. Hire those with complementary skillsets and let them do their jobs.
Delegating well is a hallmark of effective leadership. It clears the path for you to guide optimal scaling.
Maintain Agility
Larger organizations naturally tend toward bureaucracy, complex processes, and inertia. But you need to remain quick and agile, especially in a rapidly changing business landscape.
Regularly re-evaluate systems and tools to optimize efficiency as you grow. Nimbly adapt plans and operations based on learnings and new innovations.
Empower cross-functional teams to prototype and test ideas without bureaucratic delays. Maintain open communication channels for rapid iteration and pivoting when needed.
By preserving an agile, entrepreneurial spirit amidst growth, you gain huge advantage over lumbering competitors. Scaling and agility can positively reinforce each other.
Make Data-Driven Decisions
With so many moving parts, scaling decisions need to be rooted in real data vs gut instinct alone. Leverage analytics for insight.
Track detailed metrics on customer acquisition costs, conversion rates, churn, lifetime value, platform analytics, sales funnels, and more. Analyze trends to guide optimal resource allocation.
Implement tools like CRMs, ERPs, and BI software to generate actionable data. Hire data talent to distill insights. But also listen to anecdotes from the front lines.
Information is power when scaling
Here are five critical steps to scaling your business:
Take a hard look inside your business to see if you are ready for growth. You can’t know what to do differently unless you take stock of where your business stands today.
Strategize what you need to do to increase sales. Then assume your orders doubled or tripled overnight. Does your organization have the people and systems to handle those new orders, without failing or getting a big black eye? This is where a good plan is essential.
The best planning in my view starts with a detailed sales growth forecast, broken down by number of new customers, orders, and revenue you want to generate. Include a spreadsheet that breaks the numbers down by month. The more specific you are, the more realistic your sales acquisition plan can be. Then do a similar expense forecast, based on adding technology, people, infrastructure, and systems to handle all those new sales orders. Look at every item on your current P&L to see how it might be impacted. Expenses will go up — you have to anticipate where and how. Again, include an expense spreadsheet that breaks down expenses needed to meet your sales forecast.
Try to think of everything. You’ll need to do some hard thinking and research to come up with proper cost estimates, but doing so will make your plan better.
Scaling a business doesn’t come free. Your growth plan may call for hiring staff, deploying new technology, adding equipment and facilities, and creating reporting systems to measure and manage results. How will you find the money to invest for growth? I’m a huge proponent of bootstrapping, but it typically takes years to grow through bootstrapping alone. There are also small business contests with cash prizes such as the FedEx Small Business Grant Contest which starts taking entries on Feb. 21, 2017. If you have a great story to tell about your business and could use a $25,000 grant and $7,500 in FedEx Office® print and business services to boost your business, this is an amazing opportunity. It’s also helpful to identify potential bank funds to accelerate growth such as a loan or a line of credit to draw on – start with how much you’ll need. And get started applying.
Scaling your business obviously assumes you will sell more. Do you have the sales structure in place to generate more sales? Look at sales from end to end. Do you have:
- A sufficient lead flow to generate the desired number of leads?
- Marketing systems to track and manage leads?
- Enough sales representatives to follow up and close leads?
- A robust system to manage sales orders?
- A billing system and a receivables function to follow up to ensure invoices are collected timely?
Technology makes it easier and less expensive to scale a business. You can gain huge economies of scale and more throughput, with less labor, if you invest wisely in technology.
- Automation can help you run your business at a lower cost and more efficiently by minimizing manual work.
- Systems integration is a prime area for improvement in most businesses. Companies today don’t run off of a single system — they may have a dozen or more systems. If those systems don’t work together, they create silos, which in turn multiply communication and management problems as your company grows.
Now’s a good time to evaluate new products on the market that save time and money, yet accommodate much higher volumes in every part of your business. Look at CRM, marketing automation, sales management, inventory, manufacturing, accounting, HR, shipping, and other technology systems.
Evaluate not only software but also networks and hardware such as servers, computers, printers, and telephony equipment.
How to Scale Your Business
Should you scale your business or attract new customers?
Increasing sales is a top priority for any business looking to scale. Scaling sales can either mean adding new customers or growing the average revenue from current customers. While both options drive results, expanding your relationship with current customers is often more cost-effective than attracting new business.
What does it mean to scale a business?
While any business leader dreams of becoming an overnight success, successful scaling involves building and executing a long-term, sustainable strategy. No matter the size of your business, understanding what it means to scale and identifying actionable steps you can take to do so are both key to reaching your goals.
How do you scale your business?
1. Build a strong team. Scaling your business requires talented, aligned individuals. Hiring the right talent and investing in their development lends to a culture of collaboration, engagement and ownership.
Should you scale up your business?
You should only take your business to the next step if you’re truly ready for a bigger enterprise. Scaling up means your company is going to take more time, resources, and expertise that you have to be prepared to give. Scaling up is an exciting time, but you’ll need a level head to get it done in a way that’s sustainable for your business.
