From a moment of inspiration to an idea then a start-up, growing a business is fraught with challenges. Contrary to what you see in growth charts, developing a business is not linear. There are twists, turns and sharp curves in the journey toward success and profitability. For many businesses that want to transition from the start- up stage, the challenge is how to scale the business with less risk.
Scaling your business is an exciting proposition that carries serious risks especially during the beginning phase. You want to accommodate the increase in volume without compromising funding resources. Any incremental adjustment in costs in terms of manpower or assets should contribute enough revenue to validate its acquisition. Many start-ups have been able to cross over, survive and eventually thrive in the business scale-up process.
Here are five smart ways to scale your business:
#1. Review Your Projections Carefully
In business, paying attention to key statistics and indicators are crucial in the planning stages of any scaling program.
When preparing to scale, staying attuned to business numbers is important because strategy follows numbers, not the other way around. Thus, it is advisable to maintain a conservative approach when coming up with projections.
Assess the maximum capacity of your current infrastructure. How much more business can your infrastructure handle before it tips past equilibrium point and toward diminishing returns?
Do not let it get to that point. You must give your business room for maneuverability by investing in its infrastructure. Create a product to cost matrix so you see which factors of production account for the highest incremental cost to revenue.
#2. Implement Cost-Effective Solutions
The idea of scaling is to increase your revenues while effectively managing the incremental costs of production. When a business starts to grow, you should expect costs of production to grow as well.
In the early phases of expansion, you should consider implementing solutions that are cost-effective without compromising the quality of work. In terms of manpower, you should consider hiring virtual assistants.
Virtual assistants are well-experienced individuals who work online from a remote location and are contracted to perform a specific task or render service. These are not just virtual secretaries or personal assistants. You can find a virtual assistant suited and highly-proficient to manage any task you need.
Virtual assistants are cost effective because the cost of hiring them is comparatively lower compared to a regular employee. You don’t pay them benefits and they are accountable for their own costs of business. Thus, you don’t incur incremental costs to production except for their fees.
#3. Hire Right-Fit People
Whether you opt for virtual assistants or regular office employees, always hire based on the principle of right-fit.
“Right-Fit” refers to people who share similar values, acknowledge your purpose and subscribe to your vision. These are the people who will work to keep your business on course because with right-fit comes shared interests.
Many entrepreneurs and start-up business owners are blinded by a glowing Curriculum Vita that they do overlook the behavioral component in the business relationship. Every organization has a culture. If the culture germinates a destructive organism the entire structure will come down.
Remember, technical and fundamental competencies can be trained and improved upon. Who you are is who you were born as. You cannot change that unwillingly.
When hiring always keep in mind the saying, “You can take the tiger out of the jungle but you cannot take the jungle out of the tiger.”
#4. Adapt Flexible Business Modeling
With the growth of the Internet, the increasing influence of social media and the globalization of the economy, the business environment has become more unpredictable.
The studies, projections and action plans you created a month ago may be rendered obsolete due to changing and shifting market conditions. Developing rigid business models is not ideal with increasingly dynamic markets.
A better approach would be to adapt flexible business models which will allow you to accommodate changes in the market. Flexibility is why people remain the most important asset in times of great uncertainty.
People can adapt to change faster than technology. People can foresee change before it happens and have the necessary steps implemented in time. And investing in people costs much less compared to investing in technology.
Refer to tip# 3 and consider outsourcing services to third parties. Outsourcing arrangements are flexible, cost-effective and you are capitalizing on high-level competencies.
#5. Place Equal Emphasis on Market Retention
In an expansion process, the revenue variable in the profitability equation depends on the end user or the customer.
But the revenue variable is not just contingent on the creation of new markets. An equally important avenue or resource is past or current customers. With such a globally competitive business environment, every customer becomes valuable. The last thing you would want is to lose your customer to a competitor.
Thus, in addition, to market creation you should place equal emphasis on market retention.
The most important component of any market retention program is customer service. Customers are very sensitive when it comes to the service they receive from a proprietor.
Keep in mind that out of hundreds or thousands of proprietors in the same industry as yours with very little differentiators in their value proposition, the customer chose YOU.
This is why you should treat every paying customer special and endeavor to build strong, long- term relationships with them. Customer service is the way to go:
- Open at least three channels of communication between your business and the customer. Among the most important channels are:- E-mail support, social media, chat support and inbound call- in support.
- Respond to all enquiries and questions within an appreciable time frame. The standard is within 24 hours upon initial contact.
- Use online marketing strategies to constantly stay in touch. Among the best strategies are social media, e-mail marketing and high- touch outbound customer outreach programs.
Scaling places your business at the cusp of success. It is proof that the market has taken to your products and services and has built a good following. It can be a tricky proposition but with a strategic, conservative and most importantly, purposeful approach the risk elements can be successfully mitigated.
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