As with so many aspects of being an entrepreneur and running your own business, so many of the questions are the same from one business to the next, but there is no one simple answer, as all depends on a multitude of factors. These will include what sector your business is in; whether it is pre-revenue, revenue, or making profit; what your growth ambitions are; how big your potential market is and whether it is just UK or international; and so many more. In addition, the answer will also depend upon analysing at what stage your business is now and where the pinch points are in your supply chain or customer service delivery, and then taking action to strengthen those first.
Whilst it is not possible to provide one simple answer as to how to scale a business, it is, however, certainly possible to provide general answers as to what needs to be done by any business that is looking to grow. The fundamental requirement for any business is, of course, to ensure that you have enough customers that are prepared to pay the right price for the product or service that you are offering. In simple terms, growing the number of paying customers leads to the growth of the businesses. That growth can come either from attracting more enquiries and having a much better pipeline, or from converting more enquiries into actual sales. To scale properly, the aim is to always improve both metrics.
Marketing and PR, or increasing exposure in any way, should of course lead to more enquires and ensuring that the sales lead funnel is constantly being topped up. Really successful businesses have mastered the art converting a high number of leads into sales. It may be that this is done with incentives, superb customer experience and helping clients on every step of the sales journey, or it may simply be by having the best offering at the best price and being able to demonstrate that in one way or another.
But as an early stage business, once you have attracted enough attention, and hopefully started to convert a good percentage of that attention into sales, then it is imperative that you ensure that the business is well equipped to handle the sales and any enquiries. Some businesses take on new staff prior to an expansion push, whilst others start the push with existing resources first, and then hire new staff in response to growing sales as they happen. The first route requires enough initial access to funding, whilst the latter route can be funded from the growth in sales, but with the second route care must be taken not to expand too quickly and not have sufficient staff in place to respond properly to the growth. Remember, enquiries are nothing if the sales are not closed and fulfilment made well. It is much easier to lose a customer than it is to gain one.
Ultimately, growth might well dictate how your business operates and where from. It might be necessary to get bigger offices or open additional premises, take on more sub-contractors or suppliers, or take multiple steps at the same time. Potentially, these can all be done in reaction to growing sales and so be funded by them.
But it is always worth remembering that growing businesses consume cash, and if the systems and procedures, as well as all that is necessary to ensure good actual delivery is not done properly, then trying to scale can potentially damage your business or, at the very least, not provide the level of rewards that you might be expecting. The next steps in scaling your business then should always be well thought out and well planned, and that will help you to decide exactly what steps need to be taken in what order.
18th May 2021
in British English