How to Scale a Business
- How to
At their core, businesses begin as little more than ideas. However, when it comes to successful businesses, although variables such as timing, development, and dedication contribute to that success, one factor that they all share is a clearly defined business scaling strategy.
In this article, we will answer questions such as what is a scaling strategy? When should you scale a business? And most importantly, how do you scale a service business in a way that encourages growth without compromising user experience?
However, before we dive into such a broad and comprehensive term as scaling, it's useful to lay the foundations, particularly when comparing scaling to business growth.
Growth vs. Scale
Many people confuse the terms scale and growth, however, they are quite distinct from one another and it is important to know the difference.
Growth typically refers to an increase in revenue and is generally regarded as the definitive factor of a successful business. Growth also requires an increase in resources to support the increase in revenue - a lot of resources are required to sustain consistent growth.
To avoid constantly increasing resources, more and more modern companies are focusing on developing a business scaling strategy. Scaling a business enables you to grow the business and generate more revenue without having to consistently generate more resources and incur the costs involved with doing so.
Put simply; growth means a business is increasing revenue at the same time it is increasing resources. Scale means a business is increasing revenue without greatly increasing resources. So how does it work?
Business scaling strategy
An effective business scaling strategy enables a business to scale for growth, requiring both capability and capacity. Many businesses today find themselves growing exponentially very early on before struggling to accommodate that growth further down the line.
An effective business scaling strategy will ensure a business has the capacity to grow and the capability to support the growth. Although there is no definitive answer to the question of when you should scale a business, once you have a business scaling strategy in place, you will be prepared for whatever the future brings, and you will know how to strategize when the time to scale arrives.
Read on for 5 tips on how to scale a business to ensure your business is well prepared for development and growth.
6 Tips on how to effectively scale a business
In an interview about sustainable scaling, entrepreneur Tim Ferris stressed the importance of strategizing and planning your endgame. Big picture scale strategy is fundamental in understanding where your business wants to be and, more importantly, knowing how to get there.
When you are clear on the final goal of your business, you are clear on what your business needs to reach that goal. Building a business to support a lifestyle would require a different scale strategy to building a business to sell. When utilising a scaling strategy, you must evaluate and plan accordingly to achieve your ultimate goal.
Generate investment cash creatively
Unlike growth (where the cash keeps rolling in!), scaling your business is likely to require investment, and regardless of your strategy, you will need to find both short- and long-term ways of bringing in cash so you can implement your plans without constraint. The good news is that, today, there are plenty of options for small businesses looking to scale:
- Subscriptions – Depending on your product or service, selling subscriptions can be a great way to onboard consumers and generate a large amount of cash for investment quickly while also increasing customer loyalty. However, your company will make or break depending on whether you can deliver on your promises, so be careful not to oversell!
- Crowdfunding – There’s a wealth of crowdfunding platforms out there today, with many targeting for specific industries or ideas. If your idea is a good one, then you can pre-sell products or services for cash, or simply get people to make long or short term investments in your company. Again, ensuring you can deliver on your promises is critical to successful scaling here.
- Collaboration – Entering into a joint venture with another company or organization can be a great way to raise capital, and depending on who you decide to work with, it can be a reliable short- or long-term method of generating investment cash. Choose your partners carefully, however, as “selling your soul” is a real possibility when the option of quick cash is on the table.
- Bank Loans – While clearly the most conventional way of generating investment cash for your business, a bank loan is still a tried and tested method of business scaling. Additionally, with Open Banking now on the rise, you’re likely to get a much better deal tailored to your specific requirements than from a traditional bank.
Hiring the right people at the right time is fundamental in scaling a business. Once a business starts growing, founders are faced with the decision of whether to hire more team members or outsource the tasks to freelancers or third-party organizations.
This decision is dependent on the nature of your business. If you decide to hire internally, be sure to hire product minded people and let them drive your vision. If you decide to strategically outsource, consider offshore outsourcing. In order to improve and streamline the services on offer while scaling, finding the right team is pivotal.
Employ multi-faceted marketing models
When implementing a business scaling strategy, it’s important that your business operates at the greatest level of speed, efficiency and productivity. Utilising a multi-faceted marketing approach enables a business to sell its services or products in alternate ways in order to maximize sales.
Different media and distribution channels can be used to target different audiences. Email marketing is a prime example of an effective multi-faceted marketing tool for scaling, and it is little wonder why so many successful businesses are making use of it today. An efficient, multi-faceted marketing strategy would also allow you to promote and sell to different markets at the same time and, ideally, drive sales through more than one channel.
Invest in technology
Much like developing and utilising a multi-faceted marketing strategy, investing in technology wisely will streamline many business practices. Technology reduces costs, labour and other difficulties that arise when scaling a business.
Business in the digital age relies on technology. In fact, most start-ups become scale-ups primarily through efficient investments in the right technologies at the right time. Deploying the correct systems, software, and staff that know exactly how to work with such technology will allow you to achieve your business scaling goals and reduce the effort involved in doing so.
Use better commercial banking services
Scaling a business also requires having a current banking service that caters to the needs of the digital age. The correct banking service can greatly reduce the labour and stress involved with finances when developing a business scaling strategy.
Banking as a service is one approach that can scale alongside your business, offering products and services specifically designed to help you grow without the restrictions of conventional banking models—regardless of the size of your business.
Intergiro can help
Intergiro can aid your business scaling strategy and push to you towards achieving your scaling goals. We believe that technology drives progress and business drives technology. We aim to provide businesses with the financial toolkit to enable them to thrive in the digital age and design systems and products that are built for continuous development. For modern-day banking services to aid you in scaling your business, create your Intergiro business account now.
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