Ready to take your business to the next level? You are not alone. Setting up a successful start-up is only the first step. Many start-ups attempt to scale up.
Unfortunately, not many manage to see it through. A staggering 92 percent of businesses do not scale successfully. Another piece of research by McKinsey shows that approximately 80 percent of newly launched businesses manage to scale beyond the $50 million revenue mark by 4 years after their launch date.
From finding an approach that works with the vision you have for your business, to having the right tools in place to support this, here are a few questions to ask yourself as you scale your business.
Is Your Sales Strategy Ready To Grow With Your Plans?
To sustain a business’ growth, your sales need to support it. The increase in sales will be needed to account for the projected increase in revenue.
This means businesses need to scale their sales alongside their growth to scale successfully. One of the best tips to scale your sales is to work on your targeting.
Reviewing your targeting strategy means your salespeople know who to target. Learn to rely on the data. It will help you identify key trends and behavior patterns of the key demographics.
This will, in turn, help you respond to your target market and increase sales.
Do You Have The Financial Backing To Fund Your Growth?
Your plans for scaling your business need to be funded. You may need to rent new business premises, spend more money on marketing, or hire additional staff for your growing business.
To do this, you will have to consider the sources of funding you intend to rely on and what sources of funding your business may qualify for. Assess each source of funding and its pros or cons. If you opt to use investment from additional shareholders, you must also accept that you will have to share any profits.
If you opt for commercial finance products like business borrowing, you may be able to enjoy lower interest rates and access finance to scale your business fast. However, most lenders normally ask for a personal guarantee.
Additionally, there are ways to grow without putting your finances at risk. For example, consider a virtual office address for company incorporation instead of leasing out office space, etc.
Can Your Team Handle What Comes With Scaling A Business?
Around 23 percent of businesses fail without the right team in place. When a business enters the growth phase, the importance of having a good human resources strategy in place increases dramatically.
Along with creating a plan for scaling your business, you will also need to create a plan to scale your team. It is important to remember that scalability relies on achieving increased benefits such as increased revenue without significantly raising costs such as additional recruitment costs. This does not necessarily mean you cannot make additional hires in the scaling process.
To prepare your team for scaling your business, do a workforce audit. Review employee performance including their weak points. Make note of the special skills your current team possesses that can help with your growth plans. Any identified gaps in skills or knowledge offers an opportunity for training or recruiting of suitable talent.
Finally, look out for any changes in rules or regulations that will come with expanding your team and growing your business. For instance, if you opt to hire contracted international employees, it may be wise to speak to an accountant to get advice on how it can impact income and company taxes.
Scaling up a business is not an overnight process. Getting yourself and your business ready for the process can take time, and a fair bit of preparation. It all begins with ensuring you have a great foundation to build on. Understand where your business currently is, and where you want to go. These three questions can get you started on doing that.