Scaling Your Business
So, you’re thinking about scaling your business! But what might that look like? It could be improved efficiency, a website, more automation, better equipment, a new premises, new marketplaces, more staff, collaboration, or more likely, a selection!
Before you ask yourself how do I scale, ask yourself whether you should? What do you hope to gain? If you just want to earn more money, there might be better ways of doing it. If it’s because growth is fashionable right now and you feel you should be growing your business, then consider whether that is actually right for you at this time.
Also consider how growing your business might align with your customers and your shared values? Will business growth support and benefit them? Or will you need to market to a new type of customer now?
Don’t let me put you off though. Growth isn’t a dirty word, and scaling is a perfectly admirable. Maybe you are turning a side hustle into a full time business and your current set up can’t support a full time wage. Or maybe you do just want the challenge of growing a successful business. Perhaps, it is just for extra profit – there’s nothing wrong with that, by the way. Creating wealth for yourself and others is extremely worthwhile.
Whatever it is, take some time to be sure of your motivations before you start. If you still want to go ahead, write them down and keep them handy. You’ll need them later on!
But what if we could?
However you are planning to grow, you’ll need to make a plan. You’ll come across lots of barriers as you do this and it’ll be easy to sink into a negative mindset. Don’t let yourself think everything is too hard, or won’t work for you. Instead, every time you come across a challenge ask yourself “but, what if we could, how would we do it?” You’ll find it much easier to find solutions if you change the conversation. And your planning will be much more solution focused too.
Make a plan
What’s stopping you from scaling your business and achieving the goal you decided on at the start? If your goal was to triple your sales or branch out into a new area, keep it in mind here. Do you need more sales, staff, machinery, all three? Can your existing suppliers cope with greater demand or do you need to switch? Whatever it is, write them all down on a piece of paper, now next to each make a quick note of the knock on effect of each one. For example, the knock on effect of more staff might be that you need more work space. Will you need full time instead of part time staff, and will they need pensions, tax and NI contributions paid?
If you need to triple your sales, is it just a case of spending more on advertising? Do you have the systems in place to handle the orders? If it’s a manual process now, does it need to be automated? Will your new sales push you into the VAT threshold, meaning your prices will rise to cover it?
And what about the extra customers, will you now need someone to handle customer service? Previously you might have managed all the main business roles yourself. As a small company this is often possible. But as your business grows you’ll not have the time to do it all. So think about what your role might look like and who you might need to take up the roles you can no longer handle. Will you need an accountant to handle the books from now on? Will you need someone to manage and train all the new staff? New software for payroll?
Is it worth it?
Now you know what you need to do, write down an estimated cost of each solution. Don’t worry about how possible each thing feels right now, just get some numbers down.
Now work out what difference the changes will make to your balance sheet, and over how long. Will you be more profitable or have a larger turnover at the end of year one, year five, or is this a ten year plan?
If not, no matter what your goal, will it still be worth the effort? Maybe money isn’t the goal, but if you are making a loss, how will you cover it and ensure the future of your business?
How will you pay?
It’s normal to invest in your business. Investment makes goals happen. But where will the money come from?
Total up how much money you’ll need to solve all these problems, and consider how long will it take before you’ll make a profit? There’s no point borrowing a stack of cash to invest in a fancy new premises, only to close after six months because you aren’t making enough profit to cover costs. Knowing how much money you’ll need to tide you over while you grow is essential and should be included in your costings.
If you don’t have the finances to invest yourself, you’ll need to look elsewhere. Loans and investments are obvious choices. Banks and local investment firms might be a good place to start looking. Some industries are more investible than others so look for investors that have similar values to you. Currently, anything in tech and sustainability are highly fashionable. Diets and gambling might be less so.
If you are looking to grow an empire then franchising your business might be a great option. Creating a business model that others can rent from you is a great way of achieving fast growth.
Or maybe your business would qualify for a grant? Councils often have grants available for businesses that meet certain criteria. What’s available will differ depending on your area and your local priorities. But if you are investing in young people, sustainable tech, or the community there is bound to be something. If you are a not-for-profit or community interest then you might depend on grants to sustain your growth, aims, and cover your costs.
Unless you are self funding, you’ll need to put together a rock solid business plan to prove to an investor that you can achieve your aims successfully. But, even if you are funding this yourself, I’d still advise making a business plan. Professional, experienced, investors don’t risk their money on gut feeling or determination, so you shouldn’t either. Prove it works because you risk your cash.
Before you hit GO!
So, it all looks good. But, before you get all excited and start scaling your business into an empire. Ask yourself one last question. Does all this help you achieve your original goal?
If the answer is yes, go for it. You’ll come across problems as you go, and when you do, just work through them one at a time. It’ll help to join some business groups and build a network where you can ask questions and reach out for support. And a really good business plan will help prevent overwhelm, just keep referring back to it.
We can help you get on the right path and achieve your goals!
Whether scaling your business is right for you or not. Get support with us now and we’ll help you figure this all out and make a strategy that is perfect for you!