Scaling up your business is one of the hardest things to do, no doubt about it. Not only can it be hard to decide what areas should receive the most attention, but ensuring there are enough resources to grow is even more troublesome. Ideally, a growth strategy is prepared before the business has even launched.
A pre-launch strategy may seem like something to be put on the back burner, but it isn’t. Knowing what areas are the most likely to grow, how they should be ramped up, and what resources for growth are available is key to a successful business.
While implementing a scale-up strategy can be nail-bitingly scary, it means a business is doing very well. A business that is ready to grow is a business that is so successful that it can no longer support its customers and bring in new work with existing resources and infrastructure. A good growth strategy will improve a business capacity to meet the needs of its users and will improve the company’s profit margin.
Seriously, don’t push a small business into growth before it’s ready. Nearly 75% of all entrepreneurial failures can be traced back to CEOs pushing for growth too early and too hard.
Related Article: When Should a Small Business Focus on Growth over Profits?
A small business that is ready to scale is one that has its fundamentals down perfectly. As any basketball player will tell you, it’s all about the fundamentals. A small business that tries to scale before it can function seamlessly at its most basic level is a small business doomed to failure. Get those down pat before trying to grow. The basics include:
- the service or product offered by the company meets the needs of the target market;
- ensuring that there are proper resources for growth available;
- Knowing where the company is making the most money and if growth is appropriate via that method;
- Successful marketing. In order to grow, a small business needs to have client awareness.
Think to the Future
While it is tempting to focus on the present and near future, a smart entrepreneur is always looking ahead to the distant future. As mentioned above, a growth strategy is planned out before the business is even off the ground. How will the business go from making $1 million a year to $10 million? To $100 million? Be realistic, but plan big.
This is especially true when seeking investment cash, a necessary step for pretty much any SMB. Investors want to know not only that the business is well-equipped to handle growth, but that the founding staff is thinking long-term. It also demonstrates that the founders believe in their company and that there is real potential for growth.
Of course, be reasonable. Think big, but realistically. No one will invest in a company that thinks it’s going to go from making $0 to making a billion dollars overnight—at least not without evidence and realistic support.
Develop an Image
Investors don’t care about the company. Well, that’s an oversimplification: yes, they care about whether or not the business is feasible and has potential, but really they want to know if the founders/CEO have what it takes. Bill Gates, Steve Jobs, Jeff Bezos are CEOs who are virtually synonymous with Microsoft, Apple, and Amazon, respectively.
A company’s CEO should have a strong public profile and a fantastic network. As the old saying goes “it’s not what you know so much as who you know.” And the flipside of that is do they know “you?”
A good CEO spends only a little time working within their SMB; that’s why they have trusted staff. Instead, the majority of their time is spent on building relationships, networks and on creating a solid public persona.
Having a trusted staff is also just good sense. Beyond the obvious nicety of working with responsible people, it’s also important to have a staff that can run the business if the CEO isn’t present—no company should be entirely dependent upon one or two people.
Don’t Skimp on the Staff
Most startups and SMB start off employing only the bare minimum of workers necessary. That’s not a problem until the company is ready to scale and there aren’t enough employees. This doesn’t mean hire 10x the needed staff—keep the initial staff just barely over what is necessary.
Half the time, a SMB is ready to grow before its CEO is prepared to handle the growth. By preparing to ramp up before it’s necessary, a SMB owner isn’t caught unawares. When growth does come, there are enough trained employees to handle it and a CEO doesn’t have to scramble to find qualified help.
There should also be an automated and universal process for training new hires (and everything else; automation is the key to a long life!). This will allow incoming employees to be quickly brought up to speed. It also helps establish the company’s protocols so that there is no lag between issues and solutions.
Author: Sakshi Sharma is an employees of Software Developers India. SDI specializes in high tech enterprise solutions for small businesses – everything from actual product development to market/growth strategies. SDI is a company that has helped SMB and startups grow by leaps and bounds. If you would like to know more, call at 408.802.2885 or follow SDI on Twitter.