By: Rob Stone- Founder & Director of Instaloft
The goal for most businesses is growth, whether that business is a brand-new start up, or one that has already attained a solid foothold in the market. 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 scaling it.
Though growing and scaling are often used interchangeably, there are distinct differences between the two. Growing your business essentially boils down to increasing your customer base and hiring additional team members to deal with this increase.
However, when this growing demand from customers begins to exceed what your business can actually handle, you risk either losing custom, or comprising on the quality of your service. Likewise, expanding your team without first implementing the right processes to manage them, can result in overspending on new hires without a system in place to ensure they are working efficiently.
Scaling a business effectively means not only growing it, but also having strategies and systems in place to manage this growth and prevent stagnation due to poor planning.
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.
The most important thing is being able to recognise when your business is starting to operate at its maximum capacity, and when your current processes are at the upper limit of what they can handle.
Recognising this before your business becomes overwhelmed will allow you to begin developing a strategy for continuing to deliver your product or service at the current level of demand, while also remaining cost effective.
Key signals may be increasing waiting times for your customers, if they are waiting weeks on end for your product or service then that’s a possible indication that you need to increase your delivery capacity.
Likewise for staff members, if your usually great team suddenly seem to be making mistakes or not getting things done like they normally would, it’s quite possible that they now have more work than one person can handle.
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.
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, and this involves 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 can even cause you to burn yourself out and lose interest. 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.
In order 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.
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.
Rob is a highly driven and determined entrepreneur, whose rags-to-riches story has seen him create and grow the Instaloft brand from a small start up, to a £14 million turnover empire in just 7 years.
With invaluable expertise in business development and people management strategies, Rob is now on a mission to double the firm’s revenue to £30 million within the next three years, whilst taking the time to ‘give back’ to the business community by helping aspiring entrepreneurs on their own journey to success.