Scaling a business isn’t the same as growing a business.
When you scale a business, your business resources and systems can handle the pace of your growth. The quality of the products and services you deliver doesn’t suffer. They are often enhanced, or at the very least, they remain the same.
Growing a business, on the other hand, doesn’t necessarily mean that the growth is efficiently handled. If you try to grow too fast without having the capacity to do it, you’ll create a lot of problems for your business.
Scaling must be handled strategically. Here are five tips to help you to scale your business.
Tip 1 - Have a plan
There’s an old saying that businesses don’t plan to fail, they fail to plan. Planning is crucial to scaling. Key questions to ask include:
- How could your business handle an increase in sales?
- Do you currently have idle capacity, or would you need additional resources?
- If you would need additional resources, what are they?
- How would you ensure that your product or service quality didn’t suffer?
- How would your business systems and processes be affected?
- Could you invest in technology to enhance your capacity or streamline your processes?
- Could your supply chain cater for your growth?
- Would you qualify for bulk discounts from your suppliers?
The answers to these questions should enable you to plan realistic revenue and expense forecasts to help you make profitable scaling decisions.
Tip 2 - Invest in technology to enhance business productivity
Using technology can be the fastest and most efficient way to scale a business. It can allow you to produce more with less cost. Examples of technology that can increase productivity and help businesses to grow include:
- the automation of repetitive, manual tasks.
- Software that enables you to seamlessly integrate business functions and systems, such as customer relationship management, accounting, inventory management, production, HR and distribution software.
Tip 3 - Get cost-effective finance
Expanding a business comes with increased costs. Even if these costs are more than offset by increased revenue, the costs invariably come first. For example, investments in more:
You may need finance to cover these increased investments. If you do, it’s important that you finance your growth on the best possible terms to minimise your costs and maximise your growth potential.
Tip 4 - Generate more sales
Obviously, your business won’t grow unless you make more sales, even if you enhance your capacity to produce more goods or services.
Take a look at your market size, your current market share and the way you generate revenue. Answer these questions:
- How could we generate more sales?
- Could we generate new revenue streams?
- How much should we increase our investment in sales and marketing?
- What competitive advantages could we exploit in our sales and marketing?
- How could we improve our product or service offering?
Tip 5 - Consider strategically outsourcing selected business tasks
A cost-effective way to grow can be to strategically outsource business functions that a third party may be able to more efficiently provide for your business.
If you do, it’s important to set up an arrangement that’s mutually beneficial for both you and your outsourcing partner. It’s also crucial to agree on appropriate policies and procedures to ensure that the performance of your outsourcing partner meets your business needs and expectations.
If you’d like to learn more about how finance can help you scale your business, please call our friendly team on 1300 760 205 or contact your broker or BDM. At Earlypay, we specialise in business finance, including business line of credit, invoice financing, equipment finance, and trade finance.