Tips for Building a Business That ScalesOctober 7, 2019 September 27, 2019 /
Do you have goals for scaling your business?
Most people who start a business don’t aim to be just “average.” Growth can mean that you build a venture that is set to be around for years to come.
One of the keys to sustainable growth is to create a business that is scalable. This means that your growth doesn’t exceed your abilities to cope with it — you’re able to scale your operations up or down.
Here are a few tips for building a business that scales:
Evaluate your business
Having an accurate picture of where your business currently stands is always a good place to start. Your aim should be to take a hard look and assess whether you are ready for growth or not.
Look at your critical reports: your sales growth forecast, profit and loss, and expenses. Consider how you are going to acquire new customers, how your revenue might fluctuate, and how expenses may increase.
Try running a few scenarios. Here are some example questions to get you started:
- What happens if we doubled orders overnight?
- Will our website cope with twice the traffic?
- How will orders be filled while keeping up service standards?
- What do we need in place to ensure that we have enough product or enough people to service the customers?
Priorities and finances
During this evaluation, it’s also important to define what your own priorities are for the business. Some entrepreneurs want to continue expanding until they become a large multinational company, some want to be a brand that’s recognized nationally, some want to serve their local community very well, and others just want the ability to make money while they sleep. All of these goals require some ability to scale operations, but they differ in terms of the level of scalability.
Another critical part of your evaluation should be the financial side of scaling. Most sorts of growth activities require some monetary investment upfront, such as marketing spend for a new campaign or labour costs for added staff. It’s important to assess your budget as this can often guide you toward what you can do right now and what you need to do later, when you have more funds.
From here, you can look at the factors that will help you to achieve your desired scalability.
Have solid systems and processes
One thing that you certainly can’t scale forever is your time, or the time of other people in your business. When work is added, there’s naturally a point where you can’t take on any more — we all need our breaks! A business that relies on the presence of one specific person to keep things running is not scalable.
This is why it’s vital to devise systems and processes that allow you to scale without adding a whole lot to your workload. We suggest considering these from early on in the founding of your business. Systems and processes allow you to automate some things, as well as more easily delegate key tasks.
When you’ve done a good job of automating and systemizing whatever you can, you will be running more efficiently. This makes it easier to see if you might need to add more staff to handle the workload. It’s a good way to stick to a budget too.
In fact, consider this: most major investors or acquirers of businesses look at systems and processes as part of their overall assessment of the business’ value. Having good processes in place suggests that you have built the business to be sustainable. This systematization also make it easier for someone new to step in.
Setting up your systems and processes
Here are a few steps to consider:
- Note down all of the key tasks that need to happen within your business. It can help to create “process maps.” These indicate workflow, or what happens and when/how. For example, “when a lead fills out the contact form, their details go into our database and we call them within two working days.”No task is too minute to document. If it is required to keep your business ticking, then it should be noted down.
- Make an assessment: are there any parts to your processes that aren’t currently automated but could be? For example, let’s say that a particular member of staff has to look for leads in the database before making the follow-up call. You could set up an automated process to make that task less prone to human error. This might involve automatically having a task created and assigned to the person who is to make the call when the lead comes in. The idea is to streamline every stage of the process so that the most efficient use of time can be made.
- Invest in necessary technology. This powers your ability to automate processes, getting more throughput with less labor.A point to note here is that seamless integrations are important, particularly where you have the need to use a variety of different systems. Many businesses use multiple systems with few of them working together, creating silos and inefficiencies. Where you create silos, the problem is immediately multiplied when you scale up.
Examples of technology you might need include: CRM, marketing automation, sales management, and inventory management, as well as software that helps to organize and monitor manufacturing, accounting, HR and shipping.
- Ensure that all of your key processes are documented and kept somewhere accessible. This makes it much easier to share your processes and delegate them to others. If you have good, step-by-step instructions, then a competent team member should always be able to follow along. Prioritize key areas of your business: marketing, customer service, supply chain, finances and sales.
- Pay close attention to your sales process. Scaling always assumes that you will make more sales, so this process should be as seamless as possible. Otherwise, you may spend money to drive new leads, but find that you don’t close as many sales as you expected. Consider the perspective of the customer and how you will meet their expectations.
Can work continue without you?
What would happen if you decided to take a vacation, or became sick or injured? If operations will come to a halt anywhere, then you haven’t built a scalable business.
For example, if you must always personally sign off on payroll, then how will your workers continue to get paid? Such a situation would rapidly spiral downward if it occurred. Workers need their pay and may simply stop work until the situation is rectified.
Be careful in examining for any such bottlenecks within your business. Anything that fits the description of “I’m the only one who can …” could be something that leads to issues if you are suddenly rendered unavailable.
In fact, you can look at your Business Succession and Business Continuity Plans as important pieces of the scalability equation. These are mechanisms for ensuring that your business can always continue to run, no matter where you are.
Plan for staffing
It’s always an important consideration to figure out who will be doing the work. Think about these key questions:
- What employees do you need for important functions?
- Who steps up to fill your shoes while you’re away?
- Who is on your “management bench?”
- Do you have enough customer service staff to manage growth?
- How will you access additional qualified people quickly if needed?
- If you manufacture, do you have enough staff to cope with more orders?
- Have you set minimum service standards, and do you have a plan to meet these benchmarks?
You might not need a full complement of staff right now, but you should have already considered who might you need to onboard before you’re desperately searching for candidates.
Sometimes it won’t make sense for you to hire people as direct employees. Perhaps you don’t have the budget or you don’t need them on a full-time basis. One example is the CFO — you will need the skills of a qualified CFO as you grow into a larger organization, but you may not need them daily. This is where a fractional CFO can come in handy (a service we provide here at Coker James).
Consider your options. Instead of hiring internally you might outsource, take on partners, or hire contractors. These options also tend to allow you to move more quickly, rather than spending time on an internal hiring process.
When we talk about scaling your business, we’re looking at how you can grow seamlessly and sustainably. The idea is that you should achieve economies of scale and be able to do so without large amounts of additional labor.
Systematic processes play a huge role in your scalability. Without them, you don’t get the automations or instant delegations that established protocols allow. To get the ball rolling, you need to assess your whole business, looking at everything that makes it run.
Finally, be clear about your goals for your business. It’s okay to want to remain local, but you can still benefit from being scalable. Businesses that can keep up high levels of quality and customer service under pressure tend to be here for the long haul.