There is a time in every startup business when it becomes ready to scale up further. If you are the owner of one, it is essential to recognise this moment and to take all actions to scale business successfully, without taking a significant financial risk.
Scaling is a complicated process and requires a lot of time, energy and money; at the beginning, you might face higher expenses due to a chunk of improvements and expansion that is to be done. You must analyse your business and market to be sure it is ready for scaling which means you will perform a thorough analysis to determine whether expansion is likely to provide the expected return on investment.
Evaluate financing options for expansion! But always have in mind that scaling is not only making your business bigger but also keeping costs low and increasing the profit. If the company doesn’t have sufficient retained earnings to cover the costs of expansion, you will have to get finances from bank loans or other resources. The best thing is to have a high-level finance person by your side, who will make sure that investments are in control.
Being ready to scale means that your business can handle a growing amount of work or sales cost-effectively. The first step of successful scaling is to define what your aim of scaling is and make a strategy that will provide steady growth following your future goals.
The geographical expansion will give you possibilities of taking advantage of opportunities in relocating the business to a lower cost location and expand your business. This may mean you will have to develop a portfolio of your products and services and hire more professionals to enable scaling of your business a pleasant experience.
Excellent way to start is to perform a marketing analysis. It will give you information about the size of the market both in value and in volume and show you directions in which your business will expand most favourably. Marketing analyses will also give you hints where to expand geographically and if there is a need to expand your portfolio.
If you decide to scale your business by geographical expansion, there will be additional costs you will come up to. Paying rent for new offices, salaries for employees and purchasing new equipment will be instant money loss. You might consider furniture or equipment rent such as photocopier, to low your costs and spread it out over a specified contract term. If you compare prices, for example, photocopier rental prices with purchasing prices you can see that renting provides you with capabilities and features of a photocopier without having to pay substantial upfront fees.
Hiring new qualified employees is a must when scaling. There is a choice of recruiting experienced professionals, which is more expensive or train new ones which will consume more of your time. Contractors or part-time employees may also be a good solution if a qualified full staff is unavailable.
Management is another issue to consider when scaling a business, due to increase in management duties and responsibilities. Opening additional locations can be challenging if your presence is crucial to the success of the business. Dealing with increasing number of clients and supervising additional staff will take more of your time and energy, and at some point, you will necessarily need to hire qualified personnel to manage business or employees.
Making customers familiar with your business and products/services is one of the essential steps in scaling. In the era of the internet, it is easy, because all you need to do is go online and make good connections. You can use SEO techniques, create and share content on a blog, connect with influencers, set up a social media content channel, deliver real value through email marketing or numerous other techniques. Combining a few of them is an excellent way to connect with customers. But, be careful not to use any of them for spamming.
Now, when you have read about actions need to take to begin scaling, and if you have decided to scale your business further, take a deep breath and make your first step in this challenging process! But be sure that you have done your homework and developed a plan for expansion that will maximise the odds and minimise the risk of a successful transition to a larger organisation.