Carole White, CEO of TEDCO Business Support
Knowing when to scale up your business is tough. Taking your business to the next level is a big step, and one you should approach with a healthy combination of enthusiasm, pragmatism and caution. Not forgetting that you should seek out the right advice and support along the way.
It’s easy to get complacent when it comes to running a business. When you get to the point where you’re making a decent enough income from the work you’re doing, it’s tempting to sit back and think “this will do”. However, things can change in an instant, and in my experience the most successful businesses are led by those entrepreneurs who don’t like the feeling of treading water or just keeping things “ticking along”.
This desire to achieve more and always set new goals is a crucial factor in the UK economy and it is what helps to drive productivity, profit and employment. But knowing when and how to scale up your business isn’t exactly easy. When you’re so close to something every day, it can be a real challenge to see the bigger picture. Here’s my advice for when to scale up your business, and how to do it successfully.
How do you know the time is right to scale up your business?
You’re turning down potential opportunities
The clearest sign of a successful business is a growing client- or customer-base. These are the people who support your income, and the more of them you can serve, the more you get out of it.
If you find yourself rejecting opportunities for new clients, projects and orders because of a lack of resources (be it time, inventory or manpower), then this is a clear sign you need to take stock and consider how you might put the infrastructure in place to take on new work.
You’ve got a consistently strong cash flow
Profitability alone isn’t necessarily enough to justify expansion, but if the ratio between your spending and your revenue is particularly healthy, then you may want to think about building your brand further. A short-term investment in your business could mean long-term gains.
You’re surpassing your goals
Every business owner should set themselves goals, and deadlines for reaching them. If you’re finding your goals all too easy to beat, it’s time to up the stakes. Boost your business and amp up your aspirations.
There aren’t many risks involved
It was Richard Branson who said: “Focus on your passion, start small, dream big and plan ahead. Scale up only when you’re ready – not just because opportunity knocks.” To put it another way, scaling up is risky at the best of times, so only commit to doing it when you’re seeing consistent signs that it’s time.
How do you scale up your business?
Learn from your competitors
You should already be aware of some of the other brands in your industry who are on, or slightly above, the level you’re at now. Get to know them better and consider what routes they have taken to build on their success. Could you take inspiration from their journey?
Protect your values
Things can change dramatically and suddenly as you try to scale up your business, so make sure your core values are safeguarded. These are the things that have helped you reach your current level of success, so they can’t be allowed to suffer.
Build a great team
One of the main parts of scaling up is bringing in more team members. For this, always go for quality over quantity. The right employees will add to your business environment and culture, bringing their own skills and motivation.
Bring in outside experience
Outsourcing is an additional way to expand your company’s services, and it can be very effective. Taking some of the more time-consuming tasks, like social media management, and offloading them onto an outside source will free up you and your team to focus on progressing your brand.
There’s also lots of free support and advice for regional businesses that can be beneficial to helping your business grow, like the Innovation SuperNetwork.
Find your barriers
Be honest and pragmatic when scaling up, acknowledging any potential barriers you might face. Whether it’s a lack of funding or the wrong premises, identifying hurdles can help you jump them before they turn into walls.
Monitor everything closely
As impossible as it may sound, part of scaling up is trying to predict the future of your business.
This may seem like a daunting task, but it really just means paying close attention to every aspect of your business so that nothing comes as a surprise.
This is particularly important when it comes to financial elements.
Measuring your performance daily, rather than monthly, will give you hundreds of opportunities a year to spot any issues and put them right.