How to Boost Your Ability to Scale a Small Business Quickly
And it's easier than you could imagine.
Summary: Have you ever wondered how to scale your business quickly? Looking around, it may seem that other businesses can scale quickly, but how? It's not always because they have the best product or service. It often has more to do with their mindset and preparation. That's what we are discussing today and providing you with the actionable tips to boost your ability to scale your business.
For example, many successful entrepreneurs who run small businesses use a system designed for growth called "The Success Pyramid." This is a principle that if you have a solid foundation of habits in place (the bottom of your pyramid), then building your business will be much easier and faster than if you're trying to build without them.
The allure of the rewards of scaling your business successfully is strong enough, that many owners like to skip the step of putting in the necessary foundations. Don't be tempted, the result often does more harm than good. The scenario often looks like a business that can scale but then hits a wall. The business implodes and then shrinks to a smaller size than before they started the journey.
We are here to help you avoid that with today's episode.
Ready to Scale Your Business Quickly? Here's the question you need to ask first.
Scaling your business quickly can bring pressure and stress into the business, which causes even the most reliable team member to crack. With this question, we are proactively and strategically looking to avoid all of that drama and improve our chances of success.
You want to avoid chasing problems and putting out fires when you should be planning your next move, hiring your next team member, or celebrating that big win.
The question you need to ask yourself first is:
If we were to triple or quadruple the business tomorrow, what would break?
Think about that for a minute. Tripling your business could mean tripling your team, workload, or clients. Does that thrill you, or does it scare you?
- Where would the bottlenecks and hurdles pop up?
- What would become difficult?
- Where would the business drop the ball?
Advanced Scaling Move
Scaling your business quickly does not need to mean a tripling of a workload; there are often more imaginative ways to accomplish the same result.
You may need to revisit your business model to find the answer. Want to know if now is the right time to scale your business? Check out this article.
While there are several foundations to put to the test of these questions, here are 3 areas you can start to consider.
Scaling Your Business Quickly Tip 1: Cash Flow
According to the Small Business Administration, 80% of businesses fail due to a lack of cash flow. This statistic is easy to understand when a business is failing, however, businesses that are scaling can and often run out of money as well.
The rapid pace of scaling is going to need cash flow for fuel. The beautiful thing about scaling, if we've set up those foundations well, then we can expect to see a 4-10 times (or more) return. You just won't see the return the next day.
The investment needs time to mature, at least three months, but more likely six months. A good rule of thumb here is the more significant the move, the more time it will need to produce results.
Do you have enough cash flow to wait for the results?
The second consideration is profitability.
Many business owners attempt to rapidly scale their business because they think a bigger business will solve profitability.
When it comes to scaling a service-based business, that will not work. The goal should be to reach profitability at the lowest level of revenue possible, not the highest. Fix your profitability issues before you scale, not after.
Scaling Your Business Quickly Tip 2: Managing and Growing Your Team
Growing your team is a scaling strategy that is a part of everyone's journey. There are two considerations to this area:
- What is the capacity of the team?
- Can we hire the right people quickly enough?
Does your team have the capacity to take on more efforts? In my experience, most small businesses with teams of 3 or more typically have 10 – 20% of production capacity that they leave on the table.
When you achieve that 10-20% of productivity, the results are highly profitable.
The trap that teams fall into is the busy trap.
Here's what the busy trap looks like:
When working with one of my clients, I could see that their revenue had radical swings month to month, yet their hourly employees' payroll cost did not show the same behavior.
This is the first sign of opportunity.
When I probed into my client's situation, it proved true that the team stepped up to the challenge when the productivity demand was in place. The result, a potential to increase the business' production by 15%, without needing to hire additional staff.
The critical concept is to maximize the team's productivity at a level that inspires and encourages team performance. The risk of putting too much pressure is that you will burn out one of your most precious resources in the business.
One of the prevalent challenges in 2021 for businesses working to scale their businesses is hiring the right people at the right time.
Many business owners have reactively hired their team, often hiring behind the scaling curve in a rushed procedure that does not end well.
If your scalability plan relies on having new team members joining the business, you need a more strategic and evergreen recruiting plan.
Think of it this way – one of the success foundations is developing a marketing system that is always running in the background to bring in a constant flow of new clients and return clients.
You need the same system in your scaling journey to run in the background and bring in a constant flow of new employees and retain the employees currently working for you.
Not only will this recruiting plan include this system, but it will also define the signals or KPIs that will say, now is the time to hire.
Designing and implementing this strategic recruiting plan may take time, and you may need to plan to bridge the gap.
Bridging the gap is a backup plan that utilizes subcontractors, part-time and temporary employees to allow the business to keep the scaling momentum growing while addressing the day-to-day challenges.
Scaling Your Business Quickly Tip 3: Managing the Customer Experience
A critical success measure in your scaling journey is defined by reliably delivering the same customer experience to every customer, no matter which employee delivers the service.
Most business owners worry about finding team members who can do the work, 'just like I do.'
That desire leads to a tremendous amount of frustration and disappointment for the owner.
A better desire is to develop a team that meets and exceeds your expectations in delivering the service 'just like each other.'
Defining and supporting the customer experience are the chief reasons to add scaling strategies such as employee training programs, systems, processes, and technology to the table.
Temper the desire to over document and over complicate the process. The goal here is to make things smoother, easy, and enjoyable. If the process is easy for the customer and the team, it is a win-win-win situation.
You'll see that you gain that reliability and satisfaction for your clients while also growing engagement and satisfaction for your team.
Important Reminder for Creating Processes:
Focusing on these three areas will cover 80% of your challenges and show how to get the ball moving while clearing out the roadblocks that cause some to stumble!
If there's one thing I know from experience, there is no "one size fits all" solution for scaling your company.
Every business has different needs when trying to reach its goals- but these tips will give assurance and confidence that it is possible! If we can be of assistance on your scaling journey, just book a quick chat.
Leslie Hassler is a dynamic author, speaker, and business strategist guiding businesses into more profits, cash flow, and success. Business owners come to Leslie seeking a way to strategically scale their businesses richly, stop the money leaks, and get back in control with confidence.
Using her more than 12 years of experience in business, finance, mindset, and more, Leslie takes multiple 6 and 7 figure businesses from cash-strapped and struggling to profitable and thriving with her unique Profitable Growth Incubator program.
Her genius has also been featured on stages around the United States, such as the National Association of Women Business Owners, the Women’s Business Enterprise National Council, and in publications such as Entrepreneur.com.
Leslie is a mother of two high school boys, an avid traveler, a Past President of NAWBO DFW and an alumni of the Goldman Sachs 10K Small Business program.