Home Business Insights & Advice Scaling struggles: Five tips for the small business

Scaling struggles: Five tips for the small business

by John Saunders
6th Jul 22 12:20 pm

Congratulations, you’ve survived your first few years in business – that’s the most difficult period – but now you’re facing the challenge of scaling up. Scaling a business can open you up to new opportunities, greater economies of scale and more profit, but it also brings additional risks that can threaten the stability of all of your work to date. With that in mind, here are a few tips to help you scale your business successfully by helping you maximise your opportunities while mitigating the new risks.

Forecast increased sales vs. cost of expansion

Scaling your business will not come cheap. Therefore, you should always estimate the likely cost of expansion and plot that against your forecasted increase in sales before you take the plunge. Factor in all costs of your expansion, such as additional staff, extra stock, new equipment, and larger premises to see where your new breakeven point will be. If that breakeven point is realistic, then that’s an excellent start point.

Create scalable processes and controls

Although scaling might be viable financially, the processes and controls you have in place may not be robust enough to grow with the business. Vasco de Castro; director of London based office fruit delivery company Fruitful Office shares this tip on scaling your processes.

“Regarding growth for product based services, streamlining logistic cycles is key. Fruitful Office grew successfully by minimising our delivery cycles and developing local distribution hubs across the country. This robust framework for nationwide service needs to be in place before you can operate in your expanded target area as it ensures a quality service and product for new customers.”

i.e. rather than using one central distribution hub for all of its fruit (which is much easier and more economical), the perishable nature of the product meant the business had to set up local connections in all of its service areas in order to offer fruit at the most premium and freshest quality. While the logistics around this type of move can be challenging, they’re essential.

Consider outsourcing

The costs of hiring skilled staff to do the extra work can be prohibitive for a small business, particularly when you have all of the other costs associated with scaling to worry about. That’s when using an outsourced provider could be beneficial. It can provide additional man-hours quickly while giving you the flexibility to reduce or increase your requirements in line with demand.

An outsourced firm could even take control of an entire business function, such as payroll or HR, so you can focus on the things that you do best during this busy and challenging time. While this flexibility comes at an added premium in the short term it can be worth it while your newly scaled service finds its groove.

Prioritise sales

Sales are what brought you to this point and it’s vital that you continue to make them your priority as you scale. Although money might be tight, now is the time to invest in aggressive marketing activity to generate a sufficiently high number of leads to feed your newly expanded infrastructure and service team. Ensure you have enough sales reps to follow up and convert leads. This is also the time to look closely at your sales funnel and make improvements where necessary.

This is a process that is worth revisiting regularly as you continue to grow as there is usually always room for improvement in one or all of your sales channels. We recommend checking out this great guide for optimising your sales funnel.

Set realistic targets

When scaling, it’s important to set targets that are measurable and achievable. The first step is to define what realistic means to your business. You can then start to put the processes in place to help you get there. Utilise the S.M.A.R.T. strategy for this.

That is, to keep your goals; Specific, Measurable, Attainable, Relevant and Time-bound to specific deadlines. Use these core terms to develop your Key Performance Indicators (KPIs) and make a point of incorporating these KPIs into your regular reports and team meetings to stay on track.

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