5 Clear Signs that NOW is Time to Scale Your Small Business
And how it's simpler than you think!
Summary: Do you want to scale your business? Are you feeling stuck in a rut and not sure how to get out of it? It's time for some serious reflection. Scaling your business is a big decision for many women entrepreneurs and unleashes a whirlwind of questions:
- How can the business scale if I am buried in day-to-day work?
- How can I balance everything the business needs with my family life?
- What if it goes wrong? What if it goes right?
- How do I even know if the business is ready?
When my clients sustainably scale their business, they find out just how unfounded all those concerns are.
When a business masters the scaling journey, it and the owner receive recognition from their peers, employees, and community for being the VISIONARY. That only happens when they let go of the day-to-day and step into their purpose.
As the business becomes a well-oiled machine with an engaged team who is in it to win it, another magical thing happens. The business owner finds their confidence, joy, and freedom return in glorious ways they could never have imagined.
It is so good; it’s absolutely luscious.
Many women-owned small businesses have the potential to scale up but don't have the knowledge or experience to do it effectively. As a result, scaling a business is a whole new skill to master.
This post will demystify the signals in your business that say that your business is ready to scale so you can get your business to the next level.
Growing a Business vs. Scaling a Business: What’s the difference?
Many people use the terms "growth" and "scalability" interchangeably, but they mean different things!
For this post, we'll think about growth and scalability in the following way:
Growth is the first stage of building your business. During the growth phase, you are working to form a solid foundation from scratch. Growth requires a fair amount of investment of your time and money, and your return on investment is typically breakeven.
The growth phase can look like:
- Attracting and retaining your first customers
- Launching your first service and delivering quality consistently
- Announcing your brand to the public
- Hiring your first team member
What is scalability?
Scalability is the process of maximizing the resources your business already has and creating exponential growth and leverage. Scaling your business is how you gain a higher return on your investment, ideally 4x or more.
The scalability phase can look like:
- Training your staff to be more productive
- Expanding your service offerings
- Promoting your brand to a broader audience
- Attracting a more diverse pool of clients
Scaling your business will require you to adjust the way it operates. For instance, examining your business with questions such as:
- How does the work get done?
- What does your team need to do?
- What systems do you need in place?
- How much money will you need to sustain a larger operation?
According to the US Census Bureau, only 12% of women-owned businesses achieve scalability at a profitable and sustainable level. (Do you have what it takes? Take the Scaling Rich quiz to find out)
Should I scale my business? Five clear signs that you're ready!
There's no magic revenue number to know when you're precisely ready to scale. And that uncertainty can be stressful. After all, you don't want to scale your business too soon and risk getting in over your head. At the same time, you don't want to wait too long and miss amazing opportunities! (Check out this article "How To Boost Your Ability to Scale Your Business Quickly")
Most small business owners reach a point when they know it's time to make changes to reach their next set of goals.
Strong indicators you are ready to scale:
In short, you're stuck between a rock and a hard place. Don’t lose heart. It’s an important stage to reach on your journey from growth to scalability. This is your business telling you it is ready for more, but the journey forward has to be different. Let’s look at the signs that confirm your feeling.
Here are the five most common signs you're ready to scale your business:
Scalability Sign 1: Reliable clients
If you're ready, your business should have a steady stream of new clients and many returning clients.
A returning client base is a sign that your business is delivering a quality good or service and that you're delivering it consistently.
Repeat clients also give you a sense of financial stability and confidence that your business will see future demand.
Scalability Sign 2: Revenue has hit a plateau
You've reached a point where you have enough cash coming in regularly to pay your bills and cover your necessary expenses - including your salary! However, there still isn't a whole lot of cash left over at the end of the day, and the list of things that need your attention is growing. Don't worry! This is a solvable problem, and it is a common sign that your business is ready to scale up.
Want further proof?
Take a look at your expenses. Where are you spending your money?
If you are ready, most of your expenses should be predictable and be about maintaining the operations of your business.
If your expenses are about building up foundational areas of your business, you are in a growth mode, not a scaling mode.
Only 12% of businesses have what it takes to scale their business profitably and sustainably.
Do You Have What it Takes?
Scalability Sign 3: Your team has more potential
You've got a stellar team supporting your small business, but are they working to their full potential?
Maybe your workflow feels a little clunky, or there isn't that synergy that makes it feel like things are running as well as you know they could be.
This can be frustrating, but it's also a an important sign to recognize.
In the growth phase, you focused on letting go and starting to build the right team. During the scaling phase, you're considering forming systems and workflows for your team to perform at a higher level.
Having the right systems and procedures in place will help you scale your business, so you feel comfortable delegating tasks and trusting your team to handle complex tasks without your direct involvement.
Scalability Sign 4: Growth is Slowing Down
Your business won't be scalable overnight, but it can happen sooner than you think.
What will need to change is how you approach achieving that growth. It’s easy to get high rates in the early days because it takes less effort.
Scaling requires that instead of focusing on getting 50% or 100% growth as the goal, you look to incrementally increase key performance indicators (KPIs) across the business.
Each KPI acts as a knob on your growth dashboard and often we are only looking for 10-20% growth for each KPI. The exponential factor comes into play when you compound that individual growth across all the SPIs. That is how we make it easy to scale your business.
Past growth is an indicator that things are working well and shows a potential for future growth.
Scalability Sign 5: Your Vision is Clear
Sure, you've got some big goals for your business, but do you have a vision? Goals are essential, and every business should have them. However, vision is more powerful than your next milestone. Your vision needs to be big and inspiring but not scary.
Fantasize and dream about your business's future and the impact it will make on your community. Your vision provides a mission and motivation to keep achieving your shorter-term goals.
Once you turn on the engines to scale your business, you'll find it is easier to maintain - which means your vision is easier to bring into reality.
Embracing this moment is both scary and exciting. Taking the next step to prepare your business for the journey will bring you one step closer to achieving your dreams to work with great clients, have a fabulous team and create a significant impact in your community.
Leslie Hassler is a popular author and speaker who spends much of her time coaching business owners on how to run their growing businesses by their rules. Delivering high-touch, personalized service, Leslie works with her clients as a partner, not just a consultant (who would pop in, tell you what to do, then leave).
Leslie teaches her clients a structured way to decide what to do first, second, next -- and never – in their businesses, so that they can learn to do it for themselves.
Leslie lives in Dallas with her husband and two kids, so she knows it’s not just about growing the business – it’s about getting the business ship shape so it grows and you can be home in time for dinner.
Leslie speaks on topics such as business leadership, prioritizing the business owner’s To Do list, and how to create and implement a strategic plan for growth.
If you’d like to have Leslie come speak to your group or organization, or present at your event, inquire here.