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.
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.
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.
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!