I have mentioned scaling a lot in my business and finance articles. It is an important aspect of startups and businesses in this digital age. In simple terms, scaling entails growth or expansion. Scaling a business involves orchestrating an enabling environment for business growth. Scaling seeks for a business to realize more and ever-increasingly consistent revenue. Take note that scaling is done in a phased or incremental approach. The intended results are for the long haul. Scalability is the capacity of a business to grow or expand. In short, scaling is expanding a business or startup. In this article, I discuss things you must get right or master before thinking about scaling your business.
Clear Metrics And Tracking Mechanisms
Scaling a business can be done for numerous reasons. It could be geared towards expanding into a particular market segment or geographical location. It could be to satisfy prerequisite conditions to a strategic alliance or joint venture. It could even be to build towards going for an initial public offering (IPO). Another reason could be that you are building up to an acquisition or a merger. All these varying contexts and more come with different approaches. The best way to prepare and rollout is to have clearly defined metrics that can also be traced and or tracked. For instance, if you are rooting for acquisition then it means one of your major focuses is expanding your customer and partner base.
Adequate And Skilled Team
Scaling involves lots of work and precision. You will need to have enough hands on deck to keep everything moving and in check. Having enough hands will not be enough though. These will have to be people who are skilled in their respective areas of specialization. This will maximize production, enhance efficient use of resources, and avoid errors and downtime. Often time people hesitate or dread to hire qualified and competent staff. They feel it is too costly but scaling largely necessitates having to hire or employ. At the very least you can outsource or better still, blend hiring with outsourcing. If you do not check this box of a consummate team, it will actually cost you more than getting a skilled team.
Relinquishing Direct Control Of Some Areas
Before scaling it is commonplace that you will be juggling many balls. When people are starting or businesses and startups are smaller people multitask. They obviously do this to keep operating costs at bay which is understandable. However, that approach is not sustainable for scaling a business. You will have to adjust to an operating framework where you delegate. Micromanaging will hurt scaling efforts, trust me! As you contemplate scaling your business you need to start adjusting to the idea of relinquishing some control. It can be hard to fathom or accept at first but in the long run, it will benefit you and your business.
Well Defined Standard Operating Procedures (SOPs)
I recently did an article on the importance of having a business operations manual for your business. One of the things I mentioned was on SOPs. Before scaling you can somehow get away with not having SOPs. However, when you are looking to scale the business you cannot afford to. SOPs will be central to smooth workflows and productivity. In fact, before you scale make sure you have a comprehensive operations manual for your business. I singled SOPs because they hold particular importance to the overall wellbeing of a business.
Raising Or Having Access To Capital
Do not kid yourself, scaling a business can be and is typically costly. You will need lots of capital to roll out a scaling process for your business. This is necessitated for several reasons. Scaling entails needing and getting more of literally everything. You will need more human resources, equipment, infrastructure, and other intangibles. All of that will need money and you must ensure you have put it together. You must also make sure you have a backup plan of where and how to access money if more is needed. If you cannot sort this out prior, scaling might be a bad idea because it might flop.
You are not an island and as such you must have a network. Build strategic alliances or partnerships before you scale. These partnerships will come in handy when you start scaling your business. Such partnerships can be pivotal in linking you up to market segments. They can also be a source of financial and material resources which are much-needed in the scaling process.
When scaling is now on your mind it is high time you put your paperwork in order. This starts right from the company or business registration. I say this because I know most businesses can operate for ages without formal registration. Then from there, you will need to ensure key business documents are in place. I am talking about things like contracts, non-disclosure agreements (NDAs) where applicable, policy documents, and many more. As much as possible work closely with legal experts to make sure legal you are set. You want to start scaling knowing that legally things are in order.
Establishing A Growing Retainer Base
I have mentioned the need for capital in scaling several times now. That goes to show you how paramount it is and it does you well to figure out ingenious ways of guaranteeing it. One way is to establish a growing retainer base. By retainer, I am referring to clients that bring in monthly recurring income. You have to work on this and have a huge and growing list of retainers. This will help you project and plan your finances because you at least know what to expect every month.
If you master or get these 8 things right then you are all set to scale your business. Do not be in hurry, make sure they are all in check otherwise you will only proceed to recede.