The current economic landscape is not the easiest one within which to grow a business. As recession conditions continually threaten to develop, many new and existing businesses are caught straddling the line between investing in growth and battening down the hatches. However, for the right entrepreneurs, there is a third option: scaling. But how can your scale up your business?
‘Scaling Up’ Defined
First, it can be helpful to attribute a proper definition to the term ‘scaling up’. This is a broad term by design, but one distinct from the basic term ‘growth’. Growth implies a steady ascent, wherein fresh profits are re-invested into infrastructure to give a stable base for future growth. Scaling, meanwhile, is a little less linear and a little more exponential.
Scaling up tends to describe the ability for a business to dramatically increase its revenue without making coincident investments into staff or resources. Instead, scaling businesses utilise the resources available to them, maximising efficiency and hence maximising revenue to boot. Naturally, this kind of structure for expansion of footprint is only really achievable for certain industries, and certain forms of company, such as SaaS (software-as-a-service).
Assessing Readiness
Knowing whether your business is ready enough, or even of the type to scale significantly, is the first piece of the puzzle. This is a question that can be answered easily, by looking at the talent wrapped up in your existing staff cohort and at the resource-intensiveness of the products or services you sell.
As a greengrocer, you are unlikely to be able to sell more fruit without hiring more staff to stock the shelves; as a fintech organisation, the game is a little different. Agility is key for sustainable scaling, too. You need to meet demand as it crops up, both for what you sell and how it arrives; as customers increasingly clamour for same day delivery, so too should you offer it as an option.
Financing Growth
Scaling a business is an unavoidably costly matter, even if the costs associated with scaling are slimmer than those associated with conventional growth. Streamlining is essential, which means investing the systems that enable it. The more you invest early, the less you will need to invest when the train is in motion. Angel investors are the ideal source for this funding, particularly if you can demonstrate the upward potential of your business to them.
Tracking Success
Success is not an easily-measured metric by any standards, but you should nonetheless be tracking a number of different datasets as your business scales. Revenue is the main arbiter of whether or not your scaling has worked as it should, but running costs are also key to this. You might also consider folding performance reviews and regular KPI adjustments into the mix, in order to ensure you are getting the best from your staff.
