Scalability pertains to capacity and capability for businesses. Scalability should include the capacity for businesses to grow in their business systems, infrastructure, and team. Scaling is the strategic growth of a business to stay on top of market demands, improve efficiency and increase profit margins. It is important as without scaling appropriately, a company may not meet its full potential or fail altogether.
Scaling a business means setting the stage to enable and support growth in your company. It means having the ability to grow without being hampered. Depending on your specific business model, scaling may require planning, funding, the right systems, staff, processes, technology, and partners.
Steps to Scaling your Business include:
Evaluating and Planning
Take the time to decide whether your business is ready for growth. Strategise what you need to do to increase sales. Then assume your orders doubled or tripled overnight. Does your company have the required staff and systems to handle those new orders, without difficulty? This is where a good plan is essential.
The best planning starts with a detailed sales growth forecast, broken down by number of new customers, orders, and revenue you want to generate. Include a spreadsheet that breaks the numbers down by month. The more specific you are, the more realistic your sales acquisition plan is. Then do a similar expense forecast, based on adding technology, people, infrastructure, and systems to handle all those new sales orders. Look at every item in your current profit and loss to see how it might be impacted. Expenses will go up you have to anticipate where and how. Again, include an expense spreadsheet that breaks down expenses needed to meet your sales forecast.
Attaning the Required Funds
Scaling a business includes funding that may be used to hire additional staff, deploying new technology, adding equipment and facilities, and creating reporting systems to measure and manage results. Funding and grants may be useful in this instance and DTC can assist with developing the necessary developments and provide access to a range of funders.
Securing the Sales
Scaling your business obviously assumes you will sell more. Do you have the sales structure in place to generate more sales? Look at sales from end to end. Does your business have;
• A sufficient lead flow to generate the desired number of leads?
• Marketing systems to track and manage leads?
• Adequate sales representatives to follow up and close leads?
• A robust system to manage sales orders?
• A billing system and a receivables function to follow up to ensure invoices are collected timely?
Investing in Technology
Technology makes it easier and less expensive to scale a business. You can gain huge economies of scale and more throughput, with less labour, if you invest wisely in technology.
• Automation can assist in running your business at a lower cost and more efficiently by minimising manual work.
• Systems integration is a prime area for improvement in most businesses. Companies in the 21st century do not run off of a single system; they may have a dozen or more systems. If those systems do not work together, they create silos, which in turn multiply communication and management problems as the company grows.
Business owners should look at CRM, marketing automation, sales management, inventory, manufacturing, accounting, HR, shipping, and other technology systems.
Hiring Staff or Strategically Outsourcing
Technology gives huge leverage, but businesses still require people and a good staffing compliment to run efficiently. Business owners should consider;
• Do you have enough customer service staff? Look at industry benchmarks to determine a rule of thumb for how many customers one service representative can be expected to handle.
• The people who are responsible for your manufacturing, inventory, and delivery of products or services. How many are typical for your industry per customer, and how many will you require?
• How do you find qualified help quickly? Recruiting and hiring systems are important, as are benefits and payroll.
• Management is also vitally important because as the management bench grows, so does the business.
Sometimes the answer is to outsource or look to partners, as opposed to hiring internally. Third parties may have the staff and investment in systems that enable them to be more efficient in handling a function than your company. Trying to replicate that function internally may take too much of time or money. Instead, find a reliable partner to outsource, thus positioning your business to scale at a faster rate that is also cheaper and better overall.
Contact us for further assistance today!