You did it. You created a unique product or service and found the proper niche to market and sell. You built a small business from the ground up, and now you are ready to take it to the next level. While the potential to scale your small business is vast, you must be aware of the risks involved. Read on to learn tips for successfully scaling your small business and how you can avoid potential pitfalls.
Make a Plan
When you scale a small business through increased scales, you also scale your responsibilities. Before you take on more sales, you need to ask yourself if you have the people and systems to handle such an increase. If not, you need to put those systems into place before you make promises you cannot keep. Take the time to plan how you will handle the extra work, so you aren’t overwhelmed.
Consider Current Structures and Expand When Needed
Will you need a new facility? Will you need to hire more employees? Do you have an accountant to do your bookkeeping? These are all questions you need to ask yourself before you take the plunge and expand your business. Evaluate your current systems and determine what new strategies you will need to develop to handle an increase in sales. If you plan on having a hands-on role in the day to day work of the business, consider delegating bookkeeping and marketing to a third party or hire someone to do them in house. It’s better to invest the money you are getting from increased sales into stable systems rather than trying to take on all of the work yourself.
Truly scaling a business is a hefty investment. Your growth plan may involve hiring more staff, investing in more robust marketing, etc. which all require money upfront.
Consider launching a crowdfunding campaign to secure investments if you have a pool of satisfied past customers who are passionate about the products or services you offer. To do this, you must have a clear idea of where you want your business to go and show past customers how investing in your growth will ultimately benefit them.
Many banks will loan money to small businesses, and with interest rates at a record low, more small businesses are looking into this option. However, bank loans require a lot of paperwork upfront as well as access to past bookkeeping that shows your business can pay back the loan. Consider using the MoneyBin app to track your business expenses, so you have an accurate idea when applying for a loan. Also, banks will only consider loans for businesses that have been in business for at least two years, so consider this before applying.
A joint venture is two or more businesses working together to secure profit through their combined efforts. The two enterprises create a third legal entity known as the joint venture and write an agreement about how both parties will benefit from the partnership.
Joint ventures work best when two businesses in the same industry who are not competitors work together. For example, a pool cleaning company could joint venture with a landscaping company as they both are in the luxury residential home industry but would not be competing against one another for business. A pool cleaning company may have a great lead generation program while the landscaping company has the money to fund the marketing campaign. The two companies can work together to grow their separate businesses by combining their efforts.
Invest in a Business Advisor
There is only so much information you can obtain from reading articles and doing research on your own. Eventually, you need advice tailored to your niche and your business from experts who have done what you are trying to do. While good business advice is not cheap, the information gained from speaking to an expert is invaluable. An expert can help you set reasonable goals and help you lay out a plan to achieve those goals. An expert can tell you when your plans are not realistic and stop you from setting yourself up to fail. If you haven’t scaled a business before, there are common pitfalls an advisor can point out to you before you embark on your journey.
If you have a successful small business and are looking to grow, you must be aware of the amount of work and the increase in responsibilities that come with expansion. Make sure you implement new systems to handle the growth of your business, determine how you are going to secure financing, whether through a conventional bank loan or a creative joint venture, and finally, invest in a business advisor to help tailor a plan. With proper preparations and a focused approach, the sky is the limit when it comes to scaling your small business.