How to Scale a Business: 7 Proven Tips to Succeed 

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Around 74% of startups fail due to premature scaling, which happens when a growing business hires new employees, adds too many features, and enters new markets before fully establishing its products and business plan.

Before you decide to scale your own small business, make sure you have established a solid foundation and definite goals.

We’ll also cover the most common mistakes small businesses make when scaling and explain how it differs from growing one. Let’s start with discussing how to recognize that your new business is ready to expand.

Signs That Your Business Is Ready to Scale

Before learning how to scale a business, you need to understand whether your company is ready for it. Here are the signs of it:

  • Turning down potential opportunities. It happens when your employees can no longer handle the workload. As a result, getting new customers would decrease your service quality.
  • Reaching all the short-term goals. When your business can reach its short-term goals and its revenue is increasing. However, you have difficulty achieving long-term goals.
  • Strong cash flow. It indicates that your company’s liquid assets are growing. You keep running your business, including paying your employees, covering operating costs, and purchasing inventory without significant problems.

What Do You Need to Start Scaling a Business?

Hiring people who have the right mindset and desire to scale your small business is essential. For instance, having a support team with a customer-oriented mindset will make you better understand your niche needs. As a result, you will know what features of your product you should develop.

However, only spending money on better equipment, new hires, or marketing cannot guarantee success when scaling your business. Other than that, you will need to improve your workflow, system, and internal processes.

There are many online collaboration tools for improving the shopping experience, sales, and production to help you grow your business. In addition, they make communicating with your team easier. For example, communication tools like Slack or Microsoft Teams let you share files with employees, make calls, and organize video conferences.

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To help build your relationships with customers, use client management software, such as HubSpot, Zoho, and Salesforce. Doing so will help collect clients’ information in one place, enabling your team to access the data easily.

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How to Scale a Business in 7 Steps

After ensuring that your business is ready to expand and that you have chosen the right team and tools to optimize your company’s goals, it’s time to finally get to it.

This section will explain how to scale up your business in seven steps.

1. Assess Your Current System

A system can help you achieve your goals when running a business. This creates a process that allows business activities, such as operations, invoicing, and marketing run in a structured and organized manner.

To implement a system successfully and sustainably, you will need an assessment at this level.

Various indicators can be used to assess your system, including:

  • Sales conversions
  • Profit margins
  • Expenses, such as hosting
  • Repeatable processes

Planning is another part of the business system that will guide you to reach your goals. By predicting your business growth, from sales figures and new customers to the income you aim to generate every month, you can create a more realistic plan for your business.

Furthermore, creating an effective business system will help you meet customers’ expectations and solve problems. Moreover, knowing your company’s core strengths, such as your mission and values, enables you to create a solid foundation for your business.

2. Set Definitive Goals

When scaling your business, having an objective goal helps you lead your company in the right direction and focus on the big picture. Your goals should be specific, measurable, achievable, and time-bound or known as SMART:

  • Specific – avoid creating vague goals, like “I want to invest in my product.” Instead, focus on the unique features you want to add to the product.
  • Measurable – ensure that your goals include specific numbers, for example, increasing your revenue by 20% or $1000.
  • Achievable – check whether your goals are within the scope of your industry. For example, consult with professional web developers about whether it is technically possible to add a particular feature.
  • Realistic – make sure that you have sufficient human resources or enough money to complete your goals.
  • Time-bound – create a reasonable deadline for your plans.

Before you set your business goals, you can try to split them into short-term and long-term goals.

Additionally, use the objective key results (OKRs) system to help you track and measure your results.

Suppose your objective is to provide the best delivery service in the industry. Then, the key results will be to collect feedback from 100 top buyers, interview 200 former customers, and acquire a satisfaction rate of at least 4.5 out of 5.

3. Grow Your Team

Scaling your small business means that your team will have to handle more tasks since the number of your clients will increase. Therefore, think about how many people you need to hire. Try hiring only the best talent with leadership skills ready for the rapid growth of your business.

Besides hiring more people, help the existing team adjust to the workflow. Doing so will help your current team train new employees successfully.

Furthermore, create the right environment and a company’s culture where people want to excel. For example, you can give positive feedback or reward your employees for great results. This will make them feel more appreciated.

Remember that having open communication with your team can build trust between your employees and you as an employer. It will help you delegate tasks easily without micromanaging your employees. As a result, your employees will be able to run the business even when you’re not there.

Alternatively, you can hire an agency or a freelancer to help you scale your small business faster.

4. Prioritize Customers

Customer service is one of the core values of a business. You can improve your customers’ satisfaction and achieve loyalty by emphasizing that aspect.

Use a referral program like Koodo to help you generate new leads and increase sales. Your loyal consumers can receive various rewards through the program, such as discounts and free products.

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Most businesses compete to get more clients by offering various promotions. To better understand what clients need, try building relationships with them. This will help you understand what products and services you should develop.

Additionally, focus on improving user experience and providing good service. For example, offering 24/7 support services helps resolve clients’ problems faster. As a result, you will have more potential customers and increase repeatable sales.

Many large companies prioritize customers. For instance, Amazon provides an online shopping experience with easy navigation, various product selections, and free shipping.

5. Improve Operations

When you want to increase productivity and boost your sales, you should start by improving your business operations.

Developing strong operations management will help you care for products, services, and people.

As a result, you will be able to focus more on maintaining your product’s quality. This will help your brand get more clients and earn their loyalty.

To keep your company more productive, simplify and streamline the tasks using business software, such as FreshBooks, which offers an accounting solution that helps you manage finances more efficiently.

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In addition, ask your employees to share how they would improve your business operations. This will make them feel more valuable and help you successfully scale your business.

6. Expand Partnerships

With the right partnership strategy, a business can reach new markets, add more value, increase brand awareness, and be more competitive in the industry. For example, McDonald’s and Coca-Cola have successfully used this strategy to expand their market and add value for their consumers by offering innovative meals and designing new packaging for drinks.

Before starting a partnership, it is necessary to know your partner’s values ​​and goals. Some companies focus on profits, while others prioritize customer satisfaction. If you partner with a business that does not have the same goals, you might not reach long-term success due to the clash of values.

In addition, prioritize which companies are suitable for your business. For example, you can be partnering with a brand that serves the same core buyers as you do. If you provide a web design service, you could partner with a website builder company that can offer your designed templates.

7. Optimize Conversion Rates

Your conversion rate is the percentage of your website visitors who took a desirable action, from clicking on a button and filling out a form to making a purchase. Most websites have many conversion goals, and each has its rate.

Optimizing conversion rates allows you to increase revenue, lower your customer acquisitions costs, and acquire more leads. As a result, the business can have sustainable growth.

You can calculate your conversion rate by dividing the number of conversions by the number of website visitors and multiplying that number by 100 to get a percentage. For example, if you had 100 sales from 1,000 visitors, your conversion rate would be 10%.

To optimize your conversion rate, identify your conversion goals and which part you want to improve. For example, focus on conversion that helps your marketing performance, such as how many customers subscribe to your email newsletter.

Then, make an irresistible offer. This includes using high-quality image products, creating a clear headline to show your value proposition, and keeping a good site performance.

Difference Between Scaling and Growing Your Business

Business growth refers to adding new resources to increase revenue. Most entrepreneurs will hire more employees and add new features to the technology to support growth, although they may not need them yet.

Meanwhile, scaling a business means the company’s profit increases without any significant addition, including costs and teams. In short, your company grows by relying on the right financing, tools, and your team’s capabilities.

For instance, you can use email marketing tools to drive more sales at a lower cost instead of paying for ads on certain magazines or television channels.

In general, the main difference between the growth and scale of a business is the costs incurred by the company while expanding the business. In addition, adding new resources can lead to other obstacles and may also increase the churn rate.

Google is an example of successful scaling. The company has found the right way to add more customers quickly by using strategies that save time and money, like only hiring experts and focusing on product development. As a result, they have consistent growth.

Mistakes to Avoid When Scaling a Business

Scaling a business can be exciting for a small business owner, but you may also encounter several unexpected obstacles.

With this in mind, we will cover the most common mistakes that you need to avoid when scaling a business:

  • Having no solid foundation. Before scaling a business, it is crucial to ensure that your company already has a vision, mission, culture, and goals. When these elements are in place, you can successfully implement a strategy, manage cash flow, or optimize the workflow as you will know what you aim to achieve.
  • Poor hiring. To help your business run smoothly, you need to find the right employees who will follow the company’s vision and mission.
  • Adding unnecessary features. As their business grows, many companies try to add new features without considering what consumers want. As a result, it makes their businesses less focused on customers.
  • Only focusing on numbers, not quality. Most businesses aim to decrease costs to gain more leads, regardless of service quality or customer satisfaction. Customer obsession will help you to attract valuable buyers.
  • Scaling up too fast. Seeing your profit grow is exciting, yet that doesn’t mean you need to scale your business without further consideration. You have to make sure that you can keep your consumers satisfied.

Conclusion

Scaling a business is challenging for most new entrepreneurs. It requires a comprehensive business model, a strong team, good plans, and the right tools. However, if you have a solid business plan and commitment to your consumers, the chances of expanding your business successfully are high.

Here’s a quick recap on how to scale a business:

  1. Assess the current system to know whether it can sustain your company.
  2. Set definitive goals to help you direct your business.
  3. Grow your team to keep the company running smoothly.
  4. Prioritize your customers to get their loyalty.
  5. Improve operations to increase your company’s productivity.
  6. Expand partnerships to provide innovative solutions.
  7. Optimize conversion rate to increase revenue.

We hope this article will help scale your business. Good luck, and leave a comment below if you have any further questions or suggestions.

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Sopha Mutia Adinda

Dinda is a Content Writer at Hostinger. She is passionate about WordPress and digital marketing and enjoys sharing her knowledge to help people succeed. During her free time, Dinda likes to watch movies and go to historical places.