Are you ready to scale up your business? If you've been in business for more than a year or two, chances are you have a steady stream of customers and you're starting to see profits.
While the two can be a good sign that it might be time to scale, there are a few other questions to consider before you jump in blindly and try to scale up before you nail it.
In today's post, we'll discuss the questions you need to answer to find out if you're truly ready to scale your business as well as what to do if the answer is positive.
6 questions to answer to find out if you're ready to scale up
Before we dive into questions, it’s worth mentioning that there isn't a bullet-proof rule that can tell you when exactly should you scale your business. However, there are certain signs that can guide you toward that decision.
Are you turning down business opportunities?
Are you constantly hitting or exceeding your sales goals?
Do you have a proven business model?
Do you have the right business systems in place?
Are you able to keep up with expectations and demand?
Are you ready to automate?
Below, you'll find questions that will help you recognize those signs and affirm your decision to scale up.
1. Are you turning down business opportunities?
If you're turning down business opportunities such as new leads and partnerships, cannot take on more clients or produce more of your product, chances are you've done everything to create a good product or service and worked your network to ensure a steady stream of clients and customers. In that case, it's time to scale before you reach the point of burning out and lose business to your competition.
2. Are you constantly hitting or exceeding your sales goals?
Setting sales goals as well as other goals such as the number of clients you booked is once again a good sign of having a solid product that your current market needs.
But if you're hitting and exceeding those sales goals, you are either pricing yourself too low or the demand is much higher than you anticipated. In both cases, you need to consider whether to scale up your business.
3. Do you have a proven business model?
This question ties in directly with the question above. A proven business model, along with reliable delivery method, points to a healthy and sustainable business. At this point, you can bring on more employees, invest in a better equipment or raise your prices, depending on the type of business you own.
4. Do you have the right business systems in place?
If you've been diligent from the get-go and documented your processes and created systems that accurately track your cash flow and can predict how your business will look a year or five years down the road, you're ready to scale up.
5. Are you able to keep up with expectations and demand?
Knowing your customers is crucial for any business, but if you’re considering expansion, then you need to be able to keep up with their expectations and market demand.
Are your customers happy with what you offer? Have they offered or asked about some things to be done differently? Is your product or service safe for years to come or can technology advancement easily replace it?
More importantly, are you ready to adjust and implement new technologies in order to keep up? If you answered yes to all those questions, then you should have no problems keeping your customers happy and adjusting to market trends.
6. Are you ready to automate?
Lastly, consider if you're willing to automate the more routine parts of your business? After all, once you grow and scale up, there is no reason for everything to be done manually.
Sending invoices or receipts automatically and automating certain workflows allows you to spend more time doing what you're good at and it also allows someone else to pick up where you left off if you decide to take a vacation or if something unexpected happens.
What to do if scaling up is the next step
If the answers to the above questions are positive and you feel ready to scale up, then here are a few tips on what to do in that situation.
1. Don’t go crazy with spending
While it's normal for some expenses to increase as you scale up your business, don't go crazy and blow the entire months' profits in one day. One of the biggest areas where you can expect to see an increase in cost is your marketing as well as employee pay if you decide it's time to hire more people.
However, consider balancing the spend by hiring an agency or a freelancer to handle your marketing as you bring in more employees rather than hiring a dedicated marketing expert. You can also evaluate your costs and tasks and outsource instead of hiring employees.
2. Consider establishing an affiliate program
As you scale up your business, consider establishing an affiliate program that will help you generate more organic leads. Partner up with businesses that serve the same target market as you and that offer services or products complimentary to yours. Then, offer them a percentage of the sale for each new client or customer that uses their affiliate link.
3. Find investors for extra capital and guidance
While profits might be high and everything is going well, it's safe to say that scaling a business often brings about extra costs as mentioned above. Consider finding investors that can help you with extra capital in exchange for a portion of the sales or a small part in the company.
If you find an experienced investor, a company or organization, they can even offer guidance and help as you’re navigating entrepreneurial waters.
4. Make a plan
The last tip is to make a plan on how you're going to scale up your business. This involves evaluating what is working and what's not working now, deciding which areas should scale first, and how you're going to get there — hiring more people, investing in new technology, upping your prices, and similar. The plan should also outline deadlines and a timeline for implementing each of the steps in your plan.
Scaling up before it’s time can often be the downfall of any business. In order to scale your business effectively, you need to be sure your company is ready and have a well-thought out plan. Use the tips in this article to help you decide if you’re ready to scale up and to set your business up for continued growth.