How to Scale a Business in 5 Steps

How To Scale A Business January 27, 2021

Chloe Henderson

Writer

Every company dreams of expanding and increasing its revenue from the beginning. However, businesses need to spend money to make money, requiring owners to define their income sources, internal operations, and potential leads that can supplement expansion.

By understanding the evaluation and planning processes, business owners can learn how to scale their operations.

5 Steps for Scaling a Business

A business's scalability relies on its capacity and capability. In order for the company to grow, it must have the necessary space and skills to expand operations. Otherwise, an organization can be hindered by its own growth.

Scaling a business requires extensive research and planning to ensure the groundwork is laid out before the company begins expanding.

1. Evaluate the Market and Create a Plan

First and foremost, executives need to take a holistic look at their business and determine if it is currently ready to grow. By making a list of the strengths and weaknesses, management can work on improving lagging processes.

A great way of doing this is placing the business in different scenarios. For example, if the company were to experience double its average sales overnight, would it have the means to fulfill the orders?

By starting with a detailed sales forecast, businesses can run these scenarios based on the number of customers, orders, and the income they want to generate. Demand forecasting software can break this down by weeks, months, and quarters, enabling managers to develop an accurate sales acquisition plan.

Based on the plan, it may become apparent that the business lacks the technology, employees, or proper infrastructure to handle an influx in demand. Once the weaknesses are defined, management can calculate the potential expense of expansion.

2. Define Income Sources

Depending on the business's needs, it may have to supplement some hefty costs to improve the internal systems. This requires management to define their income sources and determine which one to invest in to get the largest return on investment (ROI).

However, many small businesses find that even after putting what little money they have into their most lucrative asset, they still lack the funds for expansion. There are many contests for smaller companies that offer cash prizes to those with the best story.

For example, the FedEx Small Business Grant Contest grants $25,000 and $7,500 worth of print work to one small business each year.

Organizations should also consider expanding their credit line with a business loan.

3. Maintain Sales

In order to scale and maintain business growth, companies must be able to sell more goods and services.

From the sales end, organizations need to determine-

Is there a sufficient sales structure in place to withstand more orders?

Is there enough lead flow to generate more sales?
Are there marketing systems in place to monitor and manage leads?

Are there enough sales representatives to close sales?

Is software established to manage sales?

Is there a robust accounts receivables system in place to send invoices and collect payments accurately?

4. Invest in Modern Technology

Technology makes scaling a business much easier as it is able to handle high volumes of data and processes simultaneously. By choosing the correct solutions, companies can-

Automate repetitive tasks, such as recordkeeping, to minimize human errors and labor costs.

Integrate all management systems to create a central information hub, eliminating paperwork and data silos.

Streamline communication between departments.

Enhance data collection, aggregation, and analysis for insightful reports.

Being able to forecast future demand is essential for maximizing sales and sustaining business growth. With demand forecasting software, companies can anticipate emerging market trends, enabling them to prepare their internal systems for increased orders.

Advanced forecasting solutions can also integrate with existing management software, such as point-of-sale (POS), inventory management, and ordering systems, creating a universal data interface.

5. Secure Staff

Technology can only cover so much; businesses must have enough employees to carry out the manual tasks. To ensure there are enough workers on staff, management should-

Reference industry benchmarks to determine how many customers one employee can manage.

Determine how many employees are needed throughout the supply chain to orchestrate inventory management, order fulfillment, and delivery services.

Look into recruiting systems to find qualified help.

Determine which employees have enough experience to become management.

Tips to Increase Scalability

There are numerous obstacles that businesses may face during expansion, which can be discouraging at times. To optimize growth opportunities, companies should-

Keep Processes Simple

Complicated processes require more resources, meetings, costs, and brainpower, which can frustrate both employees and customers. Therefore, businesses should strive to keep operations as simple as possible, from product development to the shopping journey.

Don't Try to Take Shortcuts

While taking shortcuts may be tempting, it often leads to significant repercussions in the future.
Taking a shortcut means compromising the organization's integrity, ethics, and core values. This tells a lot about what a business is willing to do for sales, which can off-put consumers.

For example, skimping on product development to get the items out quicker could negatively impact the final product's quality. This could later lead to disappointed customers, decreased retention rates, and fallen sales.

Manage Time Wisely

Scaling a business requires excellent time management, as operations must be optimized to handle more orders and tasks. While it is easy to get caught up in the details, business owners must look at the big picture and decide what requires the most attention each day.

Reference Relevant Data

Companies that rely on guesswork can only grow so big, whereas businesses that collect their data can continuously improve their decision-making. Organizations can collect data from each customer interaction to define-