Your business is getting tons of attention on social media, your phone has continued ringing, and orders are coming in by the truckload. You've finally done it, and the hard part's over now, right? Wrong.
Now that you've got a successful business, it's time to start thinking about scaling. Scaling your business means taking it to the next level, and it can often be overwhelming. In the competitive market, however, failing to grow is a failure.
The U.S. Bureau of Labor Statistics reported that half of all small businesses would fail in their first four years. You must know when to scale up to keep your million-dollar idea from disappearing. Luckily, determining if your company is ready to expand is easy.
Assessing your current business status
Before brainstorming how to scale your business, you must assess your current situation. To understand your company's position, consider your revenues, expenses, and customer base. Why? This assessment is your baseline to refer back to as you start thinking about scaling.
From there, you should ask yourself the following questions:
Do you have enough capital to invest in scaling?
The scalability of your business is easy to figure out if you have a lot of positive cash flow, which means that you consistently make more money than you spend. The exact amount will vary from company to company, but having a steady stream of income and a positive overall balance gives you a low-risk chance to grow your business and offer more services.
Do you have the necessary resources to expand?
Regardless of your profits, scaling your business will only be easy if you have the right people and tools. Consider how many people you'll need and what systems you already have to ensure you're ready for the extra work.
Is the demand for your product or service high enough to justify scaling?
One of the most significant indicators of success is demand. If your customers ask for more of your product or service, this is an excellent sign that your business is ready to scale. Alternatively, consistently turning down potential business opportunities—regardless of whether a lack of inventory, personnel, or time is the culprit—is also a sign that it's time for growth.
Are you surpassing your previous goals?
This may seem obvious, but it's very easy to overlook. You've looked at your company's trends and know whether you've met your quarterly and annual goals. Surpassing the goals you set when you first started your business is a significant win—and a hint that your business needs to evolve.
Taking the leap
When the answers to the previous questions are all yes, it's time to start planning for scaling. You don't want to jump the gun, however, and you should take the time to plan out your next steps.
Analyze the market: Before you make any major decisions, you should take the time to analyze the market and your competitors. Prioritize getting a hold of market data, either internally or externally. Understanding the industry will allow you to determine if the time to strike is now or a few months down the road.
Okay, so you've assessed the market. Now what?
Form a (reasonable) game plan. Creating an outline is essential for any business looking to scale. Still, you want to ensure that your plan is realistic and achievable. If your plan is too ambitious, it could cost you more than anticipated. Try setting goals that can be accomplished in a specific amount of time and will benefit your company in the long run.
Evaluate your options: What will benefit your company most? Is it outsourcing? Expanding your team? Opening additional locations? Look at your options and decide what will fit your company best. Remember that the "one size fits all" mentality doesn't apply to scaling your business.
Look inward. The most critical part of scaling is ensuring your team has the right tools. If you notice any weaknesses on your team, take the necessary steps to address them before you start to scale. Don't fall victim to "rush hiring": spending resources to train your employees may be a better call than hiring new ones.
Think outside the box: Scaling can be costly, and you want your business to run smoothly. Consider alternative scaling methods such as technology, outsourcing, or franchising. For example, if your call center is busy, you might want to add an automated helper program to your website.
It takes time and patience to grow your business, but it's the only way to ensure you'll keep doing well. You can take your company to new heights and get ahead of the competition by studying patterns in the industry, leveraging your existing resources, and building a reliable team.
With dedication, hard work, and the right strategy, you can ensure that your million-dollar idea is here to stay and thrive in the years to come.