Scale before you fail: How to scale your business to avoid bad growth

The goal for most businesses is to grow, so the concept of bad growth may seem counterintuitive to a lot of business owners. Read more: Scale before you fail: How to scale your business to avoid bad growth

Scale before you fail: How to scale your business to avoid bad growth

The goal for most businesses is to grow, so the concept of bad growth may seem counterintuitive to a lot of business owners.

However, if that growth is not sustainable in the long-term it can become little more than a drain on your resources.

The focus, therefore, should not simply be on growing the business, but on sustainably scaling it. This means having strategies and systems in place to manage this growth and prevent stagnation due to poor planning.

Without this, you may quickly find yourself in a position where the growing demand from customers begins to exceed what your business can actually handle, which can lead to losing custom, compromising on the quality of your service, or overspending on new hires, all in an effort to keep up.

Knowing when to scale

There is no hard and fast rule for when it is appropriate to begin scaling, and different types of businesses will inevitably scale at different rates.

As a business owner, your job is to recognise when your company is starting to operate at its maximum capacity, and to do so before the business becomes overwhelmed. This will enable you to develop a strategy to continue delivering your product or service without overspending or compromising on quality.

Key signals might include increased waiting times for your customers, or your normally great team making mistakes or simply being unable to get things done as they otherwise might.

Learning to spot these signs isn’t an exact science but if you keep your eyes open for these changes within your business, there’s usually a strong reason behind it.

Thinking big

Successfully scaling your business means you must have a clear vision of where you want to be, and this involves thinking big. It’s crucial to set up your business with an end goal in mind, taking stock of where your company currently is, and exactly what you need to do to reach the next milestone. This will allow you to develop a strategy that anticipates expansion.

Having the right team and connections as you begin to implement your big ideas, as well as investing in products and systems that will grow with you as you start to expand, will save you the headache (and expense) of constantly having to upgrade as your business starts to scale.

Don’t do it alone

Starting a business requires a huge amount of self-determination and an independent streak, but this can often lead owners into thinking they need to handle everything in their business by themselves.

As your business begins to scale, it becomes unfeasible to handle every operation yourself, and trying to do so can result in expansion stalling or stagnating completely. It’s worth identifying areas of your business that can be outsourced, operations that can be automated, and responsibilities that can be delegated, so you can focus on steering your ship with conviction.

It is your vision that will drive your business forward, so it’s essential to focus in on key activities that will allow for strategic expansion in the long-term.

Use your data

Scaling a business can be expensive, but that doesn’t mean it should be a case of simply throwing money at it without a firm grasp of where that extra spending is best placed.

To scale your business sustainably, your decisions around growth should be based on your data, which will provide the insights and metrics you need to plan ahead. It gives you a clear idea of the costs involved with delivering your product, generating a sales lead, or hiring a new person, and allows you to account for this as you begin to implement your plans for expansion.

Having a solid comprehension of your data will help you avoid unnecessary expense and wasteful spending, which is key to keeping your business stable and improving cashflow as you scale. Ignore what your numbers are telling you, and it’s likely your profits will start to stagnate or even decline.

Conclusion

Every business has to start somewhere but starting small doesn’t mean staying small. Laying your foundation for scaling early on by implementing the right systems and processes and investing in a strong team, will help you avoid unsustainable growth and strategically scale your business step by step.

 

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Scale before you fail: How to scale your business to avoid bad growth

Source : Business Matters More   

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