When you start seeing signs that your business is ready for the next step, then you can take it up a notch already. Small or emerging businesses account for 44% of US economic activity and contributes two-thirds of new jobs. There is a high failure rate so having the chance to scale up needs to be precise and well-executed.
When a company scales up too soon and too fast, it makes itself vulnerable to a menu of problems that can disrupt the high sales streak. According to statistics, small businesses usually fail in their 4thyear due to the cost of quick expansion. In this article, Estel explains when is the right time to scale up and what you need to have before doing it.
Your business might misunderstand a one-time off the sales chart to expansion but it’s not. Consider scaling up when your company has the following things
The lack of funding is the main reason businesses close up in that crucial four years. Scaling up will cost money and you need to check if your current cash flow can sustain keeping the business on. This can help you forecast properly and how much to spend before losing money This way you can be financially safe whether the projects for scaling up will take a longer time.
When your success is repeated and you know what is your winning formula for creating sales. This ensures that you understand why you are doing well and how you can keep doing that. By this, you will know what area you need to develop and grow and can lay the foundation on your research for scaling up.
When you have pinned down your business’s core values, culture and brand identity, then you can scale up without losing what made you successful to begin with. Your company’s vision and mission can help develop what client experience you want, what team culture you need to develop and what product to further deliver to your target market.
Evaluate why are you scaling up, how much it will cost, and when are you going to make a profit off it. If you have an established brand, your why will be easy and you will have focus. Scaling up doesn’t mean all ends of your business need to expand simultaneously. If cash flow is limited, check what areas are critical for growth
Forecasting is important because it manages everyone’ expectation on how long the spending will last until payday comes in. Forecasting can happen when sales are stable every month enough to see a pattern or trend. Seeing trends allow you to counter the negatives and create solutions.
Scaling up means using technology to your advantage. Depending on your objective, technology can reduce time and effort to make growth smoother. You might be planning on getting more sales by building your own e-commerce website or planning to automate some activities in your office to maximize staff. Automation can help run your business at a lower cost and increase efficiency.
If you find traditional coding to be slow or a little more costly, you can find a no-code agency to help you launch faster at a lower price point. Although these have their own limitations, they can create simple apps, websites or automation in less than 2 weeks. This can also be useful in launching minimum viable products or MVPs if your objective is product development.
The company is only as good as its team members. Create a team to oversee the development. Make sure it is their priority and not an addition to their existing load. This way they won’t be bogged down by their other tasks that they will have problems managing the scaling up project.
Consider what areas will you need a full-time staff and train them vigorously so you can get optimal results.
Metrics are very important in scaling up as with testing product-market fit. Metrics makes sure you are hitting milestones to avoid delays or manage unwelcome surprises. This way the team members are fully informed of the schedule, expectations and output weekly and monthly. Metrics encourages accountability to the team members in charge of scaling up projects.
Agile development means quick adaption to changes and updates needed to improve product or manage a project. The team has to be flexible in order to adapt to the changes as the scaling up projects are happening. That way you won’t end up with an irrelevant product afterwards.
Experts agree that most of the time, the best time to scale up is when you’re ready. Several unknown factors can affect your business so you have to be willing even when times are tough. That’s why it’s important to know what’s your company and brand’s vision in order to focus on it. That way scaling up won’t be as scary.