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Is It Time for Business Growth?
October 11, 2021
While all new business owners and founders cross their fingers for overnight success, the truth is that most new ventures or startups need to clock some serious hours to ensure business growth. Scaling up is complicated, intensive, and often pretty frustrating, but it’s also the foundation of serious return on investment.
Growing or Scaling?
First, it’s essential to understand the differences between growth and scale. When your business grows, the revenue and profits of your startup expand at a similar rate. Think about when you expand your client base — you’ll also need to spend the money to hire more staff to meet that demand.
On the other hand, scaling doesn’t need a financial investment for growth: Revenue rises, but not operating costs. This means that small bootstrapped firms don’t necessarily have to spend big money to see significant results.
When Is It Time to Scale?
The next question many business owners and founders ask themselves: Is it the right time to scale up? Choosing to scale too soon could put a massive strain on business processes, and research shows that premature scaling can lead to slow long-term growth — to the tune of 20 times slower than those startups who scale at the right time.
Below are the signs to look for that the timing is right for scaling up:
Staff
Your team is integral for your scale-up success. Are they ready to innovate? Will they be prepared for exponential growth? Could they take on additional roles to help allocate the increased workload? If the answer to these questions is “yes” that’s a good sign.
Milestones
When you created your business plan, you likely identified KPIs and goals that would indicate success. If you’re blowing these milestones out of the water and you’re ready for a new challenge, consider that the time is right for scaling.
Cash Flow
What’s your profit margin looking like these days? If you needed to invest money in your scale-up process, would your cash flow suffer? What would you do if the scale-up didn’t work and you took a financial loss? These are also important questions to think about.
Solid IT Infrastructure
Startups are increasingly turning to tech tools and software to support scale-ups. Does your current workplace have the literal bandwidth to support your IT strategy as you scale? You need to ensure that work continues without disruption.
How Does Scaling Work?
- Start with a strategy — it doesn’t need to be complicated and complex, but it does need to be clear and concise. Set quarterly and annual goals, analyze the market, and any information about investors if applicable. Don’t be shy about asking mentors, advisors, or business coaches for guidance if this is your first scale-up.
- Invest in tech that helps reduce the labor required to scale. Tools like customer relationship management software, enterprise resource planning systems, and collaboration tools will streamline admin processes that can take your team away from focusing on high-value stocks that directly impact business scaling.
- Outsource the tasks that can be completed by an outside partner, like marketing, website development, accounting, and graphic design. While large companies usually fill these rolls in-house, smaller startups don’t have the luxury (or the revenue) to do that. It’s a wise investment to lean on other experts.
- How will anyone know about your startup scaling if you don’t make noise about it? Amp up your marketing to send a message about your big moves with content marketing, social media strategies, and even influencers that act as ambassadors for your brand.
- Once these pieces of the puzzle are in place, hire strategically. The ultimate goal is for startup founders or business owners to trust that they could walk away for a beat and things will still run smoothly. Look for leaders that will support your scaling initiatives and effectively manage without you having to step in.
Balancing work and personal lives is always a challenge. It comes with a great deal of additional stress for a business owner as one spills into the other. By investing in a business coaching company, you can receive guidance with both sides of the equation and knowledge with which you can better balance them.
Coaching is highly beneficial for private business owners who haven’t reached the point of featuring a board of directors but who need help navigating problems as they arise. A common issue is that less experienced owners tend to focus on the problem itself instead of fixating on its source. Sometimes addressing a predicament on the surface isn’t enough, and it will merely keep returning for as long as the root issue remains. It is critical, then, to understand why the problem exists in the first place.
Business owners who want real help to improve themselves and their business can benefit significantly from hiring a business coach. Some owners still haven’t worked everything out, and are in the process of putting together their ideal vision, not just for their business but also for their lives.
The Alexander Group’s small business coaching can help identify that vision and how best to transform the business to support it — contact us today to get started!
