Many people think that studying business in college will prepare you with the tools you need to own, operate and scale your own business. That’s not necessarily the case. While college is a great place to make connections in the business world, it tends to prepare you to be an employee rather than a boss.
Here are some tips that I learned after college to help you not only grow your business but to scale it.
1. Understanding Business Scaling vs. Business Growth
While people often mistakenly use the terms interchangeably, growth and scaling are quite different.
Growth: A company increases their revenue equally as fast as they are adding resources to enable that increase. The company’s gains and losses end up equaling.
Scaling: A company adds revenue at a faster rate than they take on new costs. The company’s gains outpaced its losses, allowing it not only to grow but also to scale.
2. Evaluate Your Business
Take a hard look inside your business to see if you are ready for growth. You can’t know what to do differently unless you take stock of where your business stands today.
Create a simple sales growth forecast and an expense forecast. Break down your sales, revenue, technology, personnel and any other costs monthly. The more specific you are, the more realistic your plan will be.
3. Create a Strategic Plan
What do you need to do to increase sales? Take your growth forecast and an expense forecast, then imagine your orders doubled or tripled overnight. Does your organization have the team and systems to handle those new orders without failing? This is where a good plan is essential. Plan with growth in mind.
4. Create a Foundation
You cannot scale your business unless you’ve established processes and procedures that facilitate streamlined operations. Put your strategic plan in action. Establish processes and procedures.
By aligning and standardizing your core functions, you’ll be able to quickly build a solid foundation for the long haul.
5. Scaling Takes Money
Scaling a business doesn’t come free. You will probably have to shell out some money as an investment to take things to the next level.
Your growth plan may require:
- Hiring new team members
- New technology
- Equipment and facilities
- Creating reporting systems
How will you find the money to invest for growth? For starters bootstrapping is the way to go. This is just stretching your existing resources as far as they can go.
There are also a lot of contests and opportunities that give small business owners and startups grants that don’t need to be repaid. It’s also helpful to identify potential bank funds to accelerate growth such as a loan or a line of credit to draw on. Figure out how much you’ll need and start applying.
6. Hire at the Right Time
A bad business mindset is thinking more salespeople will lead to more business. Instead, you should ensure your product is ready to be sold.
Founders should prove they can sell the product before they hire any salespeople. However, if you are operating a business in the service-based industry, you may need to take a different approach.
Think about your strategic plan. Are those goals achievable with your current headcount? If not, it might be time to hire. But make sure everyone on your team is pulling their weight. You don’t want to hire salespeople simply because one of your reps aren’t working hard enough.
7. Strategically Outsource
Take a minute to evaluate what you need for your business.
Ask yourself these questions:
- Do you have enough customer service staff?
- What about the people who are responsible for your manufacturing, inventory and delivery of product or services?
- How many are typical for your industry per customer, and how many will you need?
Sometimes the answer is to outsource or look to partners, rather than hiring internally.
Scaling requires that you make tough choices. What functions can and should you perform—or not perform—internally?
8. Create an Ideal Customer
Now’s the time to build a buyer persona. Answer these questions to get a better idea of who your ideal client is and how you will sell to and serve them.
- Who is your customer?
- What do they do?
- Why are they buying?
- When are they buying?
- How are they buying?
- What’s their income?
- What is making them buy?
- What do they think about you?
- What do they think about your competitors?
- What do they expect from you?
Once you’ve identified your ideal customer, build your sales funnel. Keep it buyer-centric rather than vendor-centric.
9. Sell a Clear Message
Sell what your solving for your customer. Make it clear. Focus on ONE selling point rather than a lot. This will help you find your competitive edge.
10. Find your Competitive Edge
When it comes to identifying a competitive edge, it’s important to note that a lot of entrepreneurs give in to self-perceptions of where they want their business to go. When combining all the above steps of evaluating and planning you’ll be able to figure out what your edge really is.
Begin a Business with Scaling in Mind
An ideal time to scale a business is when you start your business. You need to have a clear idea of where you see your business going in 5, 10 or 20 years. This will help you set goals and see how to achieve them over time.
Every entrepreneur faces their own challenges and obstacles. It’s wise to take preventative measures, heeding these tips about planning and creating. The most important trick is to maintain a mindset to advance forward and you will scale your business with ease.