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Scaling a Business: Best Strategies to Use and Mistakes to Avoid

June 11, 2019

10 Min Read
scaling a business
Reading Time: 10 minutes

Competition in the business world today is fierce and entrepreneurs must do everything they can in order to achieve success. You may have your product selling like McDonalds burgers and you may have an extraordinary target market for it too, but the strategies used for scaling a business is what differentiates a small business, a startup and/or a profitable organization from each other.

Every Fortune 500 company once began as a mere business idea but dedicatedly scaled by an enthusiastic entrepreneur. Of course, certain factors play a vital role in how those organizations grew and tasted success — things like striking the iron when it is hot, having an effective team in place, sheer focus, and needless to mention days and nights of continuous hard work – all count in.

Scaling a business has never been an easy task. Many organizations had to learn through tough lessons, nonetheless, their experience and wisdom allow us today to execute scalability techniques and expand our entrepreneurial horizons with minimum effort in today’s digital landscape.

This blog covers numerous techniques that can help you scale your business. With valuable insights from those who overcame the odds, you can also experience sustainable growth with result-oriented business scaling strategies.

What does scaling a business mean?

Scalability is a characteristic that describes the capability of a business to perform well under an expanding workload. A business that scales effectively will be able to increase its performance even when you test it with larger outcome requirements.

Scaling in business mainly depends on two factors: capability and capacity.  Ask yourself: is your business capable enough to grow? Does it have the capacity to accommodate growth? What if a mere confusion becomes the reason for your business to stumble? Orders falling, miscommunication, insufficient staff, these reasons will leave you with nothing but unhappy customers.

In the context of business, scalability describes the ability of the business to grow without being hampered by the available resources when production increases. Technology has allowed the idea of scalability to become more convenient in recent years as it has made acquiring customers, expanding markets and scaling the business much easier.

However, many entrepreneurs often confuse themselves as if they are unable to identify the difference between growth and scaling. Let me explain this.

Scaling vs. Growth

To keep things simple, growth refers to an increase in revenue whereas scaling refers to the increase in revenue without increasing the costs of production.

For instance, let’s say you’re a service-based agency that has partnered with a new client. Now, with an increased production requirement, you might have to hire another resource as the new client will bring in more revenue for your business – that’s growth.

However, if your current team is able to deliver all the production requirements of your new client without the need of an additional resource, that’s called scaling a business.

Why do you need to scale up business?

It’s a fact that technology has opened up massive opportunities for businesses and provided businessmen with a medium to go global. Latest user-friendly apps have changed how people used to think about interacting or purchasing with a business.

You may not wish to take over the world, but there’s no reason why you shouldn’t grow by learning the latest tactics which will allow you to expand your business. You can open up new stores in different locations and diversify your current products and services.

When is the right time to scale your business?

Richard Branson, a world-renowned and successful entrepreneur says, “You never know with these things when you’re trying something new what can happen—this is all experimental.”

The “things” in his statement are the dynamic variables associated with scaling a business. Many of his quotations comprise pieces of advice like work hard, make mistakes, never quit, and follow your passions.

There is no magic formula that can identify exactly when is the right time for you to scale your business. However, there are indications to when it’s time to take that next step and scale your startup in search of new customer acquisitions, new revenue sources, and better brand recognition.

Some of those indicators are:

  • When employees are unable to handle the workload.
  • When long-term business goals are unachievable.
  • When leads continue to increase.
  • When you have a repeatable sales model that doesn’t require immediate changes.
  • When your numbers say you’re good to go.

Other than that you should also ask yourself:

  • Is there enough demand for your product or service?
  • Do you have your finances in order?
  • Are you updated with the latest tech reforms?
  • Are you aware of your customer expectations?
  • Do you have the right processes in place?
  • Do you have the right team in place?

If you’re turning down business opportunities simply because your team cannot afford extra work, that is an ideal indicator that it’s time to scale your business. If you are surpassing previous business goals, have a strong cash flow due to repeatable sales with proven concepts and reliable infrastructure alongside an atmosphere of minimal risk, then you are ready to scale your business.

Now, let’s talk about “How to scale a business?”

Best tips for scaling a business

Now with a clear picture of what scaling a business really means, let’s take a look at how to scale your business without increasing existing costs.

1. Building an impressive skill set

It’s quite clear that scalability demands an expanded skill set. Entrepreneurs need to build a team with a diverse skill set. It is important that your team understands your business goals and strive to achieve them on time without compromising on quality. It is only possible if they hold command over an impressive skill set.

Also, if need be, do not hesitate to invest in your team as their learning will ultimately reduce your work and allow you to scale your business effectively.

2. Networking and Collaboration

The mindset that promotes growth and scalability must extend itself to collaborations and partnerships outside the business. Developing a strong PR network is the key to success in the long run.

You should build a network of collaborations with people and organizations, for instance, service providers, sales partners, suppliers as well as customers as they may be willing to assist you by providing important market statistics. Such engagements may take the form of a formal alliance and when that happens, scalability becomes achievable with minimum effort.

Networking opportunities you shouldn’t miss this year

3. Investing in Technology

When it comes to scaling a business, technology makes things easier and inexpensive for entrepreneurs. You can gain massive scalability with less labor if you invest your time and money in technology wisely.

Businesses today don’t run on a single system, instead, system integration is a prime aspect for scalability for most businesses. There are numerous systems that an entrepreneur adopts in order to enhance effectiveness. Following are a few commonly used technology systems that you can set up to achieve your business scaling goals.

  • Customer Relationship Management system (CRM): Enhances user data and also increases team collaboration (especially between marketing and sales teams).
  • Improved and efficient manufacturing machines (for manufacturing businesses): For increased production efficiency to meet demand.
  • Inventory Management Software: For tracking inventory levels, orders, sales and deliveries.
  • Accounting and Financing Software: They provide timely and accurate reporting facility, allowing you to better use the information to make financial decisions.
  • Human Resources Management System (HRMS): It allows you to manage people, automate manual tasks, and sort information according to your needs.
  • Digital Marketing Tools: Allow marketers to create, test and measure their marketing campaigns with effectiveness.

4. Establishing Standardized Processes

You cannot scale your business unless you’ve established processes and procedures that facilitate streamlined operations. You must ensure the appropriate delegation of these repeatable standard processes to simplify growth of your business.

By aligning and standardizing your core functions, you’ll be able to quickly build a solid foundation for the long haul. Instead of focusing on short term fixes, you will be able to accomplish larger business goals with ease.

5. Automating processes

Automation allows you to run repeatable processes smoothly at a lower cost and more efficiently by minimizing your manual work. It allows entrepreneurs to improve the delivery time of any task. It further reduces the risk of human error as well as saves a lot of time. However, automation doesn’t necessarily mean integrating a mechanical system into the process and laying off employees.

Here, automation is the integration of a system into a process through which the number of checkpoints decreases. Hence, aside from quality assurance, automation increases the rate (yield) at which raw products reach their final phase.

For example, you can automate your welcome process while onboarding a customer after they register with your business. Once a customer signs up for your product or service, you can send them a simple welcome email in order to build a healthy relationship from the start.

6. Find your A-Team or Strategically Outsource

When it comes to scaling your business, it’s important to identify the right time to hire more team members or simply outsource the tasks to a third party organization or freelancers.

For instance, during the initial stages of a business, you have a few members in your core team who multitask. However, as the business continues to grow, it hires experts in order to improve and streamline processes so that the core team can work on scaling the business while sustaining quality. You must ensure that customer satisfaction is not at risk, or else, you will regret hiring the wrong team.

7. Understand what your customer wants

In order to fully understand what your customer really wants, your buyer personas must be able to answer the following questions:

  • Who is your customer?
  • What do they do?
  • Why are they buying?
  • When are they buying?
  • How are they buying?
  • What’s their income?
  • What is making them buy?
  • What do they think about you?
  • What do they think about your competitors?
  • What do they expect from you?

These 10 key points will allow your team to understand what your customer really wants. Also, it’s a good practice to look at the growth of your business in the perspective of your customers. Your internal team must work along in focus and set milestones of the growth for your business.

8. Identify your competitive edge

When it comes to identifying a competitive edge, it’s important to note that a lot of entrepreneurs give in to self-perceptions of where they want their business to go. As businesses scale, they begin to understand their market and products better.

Here is an example for you. A computer store owner at some point will figure out that he is better at providing after sales services rather than setting up or importing hardware. The store owner will then focus on maintaining staff and specialize in all sorts of tools required to provide after sales services instead of products.

9. Focus on increasing your sales

Scaling your business obviously means you are now looking for higher sales and revenue. Every business wants to expand its horizons by tapping into new markets and increase sales. But do you have what it takes to generate those extra sales?

To begin with, you must have an effective sales plan in place which will assist you to generate more sales for your business. Striking when the iron is hot will give the competitive advantage you need.

You must also take a look at the end-to-end sales. Ask yourself these questions: Do you have:

  • A sufficient flow of leads to help you close your desired number of leads?
  • The systems to market, track and manage your leads?
  • Enough sales team members who can follow up and close those leads?
  • An effective system to manage all those sales orders?
  • A billing and receivables system so that you can follow up and collect all your invoices on time?

Remember that without an effective sales strategy, it will be extremely hard to scale your business. Why so? Because:

  • There is no base for decision making to accomplish business goals
  • Lack of clarity won’t allow you to focus on how and where to apply your energy
  • If you don’t know what you wish to excel at, how are you going to do it?

Here are four tips you must remember in order to implement your sales strategy throughout your startup:

  • Define an effective strategy which your sales team can follow
  • Identify team members who can quickly adapt and triumph your sales strategy
  • Recruit, develop and promote those who support and excel your sales strategy
  • Get rid of the people who can’t support your sales strategy

Your sales strategy will be the foundation of your business. Having an effective sales strategy is significant, and in order to achieve measurable success in the sales world, scaling your sales is truly essential.

10. Boost Marketing

Scaling marketing operations is one of the top priorities of any business.  With great responsibilities, marketing experts working for ever-growing organizations face many great challenges.

For instance, coordination with different teams without compromising on quality, priorities, resources, and marketing metrics. They must implement an effective marketing strategy and boost operations in such a way that allows your business to scale at a great pace.

When you scale your marketing operations, your business will be able to stay lean, agile and on the verge of growth. You will be able to deliver marketing campaigns that will impress your customers.

The five rules that allow you to boost your marketing operations successfully are:

  • Opt for scalable business marketing strategies and processes.
  • Ensure that your marketing team is ready to triumph your marketing strategies.
  • If you fail to delegate, you will fail to scale your business.
  • Embrace automation, as it allows you to save time and be more productive.
  • You cannot improve it if you cannot measure it.

You can also implement the agile methodology. It works like a charm. Organizations that embrace the agile marketing framework are able to improve their productivity and efficiency. As a matter of fact, 87% of CMOs said their teams become more productive with the help of the Agile marketing framework.

Mistakes to avoid when scaling a business

Along with the aforementioned strategies that can help you scale a business, there are a few mistakes as well that you need to avoid at all costs. They are:

  1. Scaling without a foundation
  2. Focusing too much on marketing and selling
  3. Not listening to your early customers
  4. Hesitation to recruit employees with a better skill set
  5. Scaling too quickly
  6. Ignoring your people and culture
  7. Compromising your long term business plan for short term growth
  8. A wrong balance between gross revenue and profit
  9. Not understanding the economic drivers of your business
  10. Being stuck into the product road map without improvisation
  11. Unable to identify and approach different kinds of customers
  12. Refusing to implement change management principles within
  13. Believing that your investors will let you play your own game
  14. Not documenting your business processes
  15. Scaling a business is an organic process
  16. Running out of resources while scaling the business
  17. Risking customer experience
  18. Focusing on too many goals at the same time

In a nutshell

Scaling a business truly begins from its ideation stage. You must have a clear idea of where do you want your business to be 10 years down the road. With the light at the end of the tunnel, everything will connect and scaling your business won’t be as stressful as you might’ve thought.

By implementing the above-mentioned strategies, we cannot guarantee that your business will boom however, we can assure that these strategies are tried and tested, they will certainly help your business to flourish and grow in the right direction.

Needless to mention, it’s also important to anticipate things that can go wrong, because they will, however, you don’t have to worry about them. Just keep the bigger picture in focus and don’t lose that light at the end of the tunnel.

Every entrepreneur tends to face various challenges along their journey but it’s wise to take preventative measures. With appropriate planning, right team members and a mindset to advance forward, you will scale your business with little to no trouble at all.

To wrap up, if you think there is more to scaling a business, feel free to leave a comment below and let us know.

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Arsalan Sajid

Arsalan, a Digital Marketer by profession, works as a Startup Community Manager at Cloudways. He loves all things entrepreneurial and wakes up every day with the desire to enable the dreams of aspiring entrepreneurs through his work!

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