After quitting a job, investing money and taking the leap to finally launching your own business, there’s nothing more rewarding than when you see momentum and sales in your first few years. Naturally, you might be eager to take the next steps toward scaling your business. Opening a new location, onboarding new hires or launching new products or services can sound tempting to an entrepreneur.
While a steady flow of customers and sales are proof that you made the right move, the two don’t necessarily mean it’s the right time to grow and expand. Before scaling up, answer the questions below to understand where your business stands in its growth journey.
Are you hitting sales goals? Every entrepreneur should set clear-cut business goals, including sales, number of customers booked or units sold. While it is true that numbers don’t lie, it’s important to look at the narrative behind those figures. Are you hitting and exceeding sales goals too quickly and easily because you’ve priced your products or services too low? Is it early momentum or sustainable deal flow?
Do you have the right business operations in place? If you can’t accurately answer the questions above you might need stronger processes and bookkeeping systems in place before making the decision to scale. Make sure you have the right platforms or software for tracking cash flow, sales and a means to project how your business can sustainably grow for the long-term.
Do you have the right hires in place? Before scaling, you have to look at your people as much as your profits. If you have a cofounder or business partner, make sure he/she/they is in agreement with your aspirations. If you already have employees, ask yourself whether they are in the right roles. Conduct an employee review to assess whether they are happy or in need of further support.
Are you cultivating a healthy startup culture? This is also a great time to check whether you’re building the right culture for your business. Has there been high turnover or employee complaints? Or, have your early employees been loyal and dedicated to your mission? If you answered yes to the latter question, you’re on the right track.
Are you missing out on business opportunities? If you find yourself turning down too many customers or collaborations because you don’t have enough bandwidth, it might be time to hire. You don’t want to gain a reputation as being too inaccessible or, worse, turn potential clients away and lose them to your competitors.
After you go through the questions above, and determine it is indeed the right time to scale, make sure you go about it strategically. Here are five key points for scaling right:
- Seek investors. If you need extra capital, look to investors not just for more money but mentorship and guidance as well. Consider a seasoned entrepreneur or an angel investor with experience in your industry.
- Where and when to outsource. It’s tempting to wear many hats and have complete domain over every facet of your business. While entrepreneurs should be aware of how everything is going, doing it all will only lead to burnout. Look for resources that will help you automate and outsource to trusted resources, be it a virtual assistant or an accountant.
- Collaborate for growth. One of the best ways to get new leads and drum up more business is to partner with other businesses. Team up with like-minded businesses to reach new audiences via social media campaigns or pop-up events. These partnerships can lead to a win-win.
- Revisit your business plan. Go back to that first business plan you drafted before launching your business. Go over what worked, what didn’t and lessons learned along the way. Look at your five-year plan and see what’s feasible and what needs revising.
- Scale wisely. Scaling is not about going on a spending spree or spending lavishly for the sake of growth. It’s about investing in the growth and expansion of your business, in order to maximize profits for the long-term.