by Tristan Wright, CEO and Founder of Evolve to Grow
Before you fully commit to scaling a small business, you need to be sure about what direction to take.
Here are the five questions a small business owner needs to ask as part of the scaling planning process.
1. What’s in it for me?
Expansion means more for your customers and more opportunities for your staff. While you will be listening to their needs and opinions as part of your overall plan, it can be easy to overlook what’s in it for you. Make sure you cover what the change will do for you in the long term.
This business is the fruit of your hard work and labour, so it’s only understandable that one of your end goals for it is to be satisfied and fulfilled as a business owner.
As well as making sure you get the outcomes you actually want, looking at the positives can be the best way to overcome how daunting the change can initially be, especially with the risks involved.
Small business owners should ask questions like:
- How do I feel about my business now? – Scaling your business won’t be worth it if you’re unhappy with how operations are currently going. It helps to assess where your company is right now to determine whether or not scaling is a good decision. If you’re currently not okay with your business structure or systems, it might be better to delay expansion for now and spend time resolving the current issues.
- Where do I see myself in five to 10 years? – Knowing your long term goals will help you plan action steps and establish a marketing strategy that will align with where you want to be, which may include continued growth, a broader range of services or even removing yourself from the business entirely and letting your staff run it for you.
- Have I achieved everything I wanted so far? – Make sure your original goals are still relevant and you have taken steps to check them off. Looking over your previous success in achieving goals will help motivate you and give you confidence as well as show you what strategies in the past had the greatest results so you can use those methods to keep you moving forward.
- What do I want to gain when I scale my business? – This is the most important question. If there are no benefits to scaling or you anticipate more problems than rewards, then it might be best to hold off for now and work through solving the current issues to put you in a better position.
By asking these questions, you can gauge whether or not scaling your business is in your best interest.
2. Am I financially prepared for it?
Scaling your business comes with extra costs. You’ll possibly need more advanced equipment, new staff members, and additional space to accommodate the incoming workload. All of these things can be taxing, especially if you’re not financially prepared for it.
This is why it’s important to prepare a financial framework to help you identify your budget ahead of expansion. A financial framework can help you assess whether the business can accommodate the overall cost on its own or if funding from investors is necessary.
If you need extra funding, consider finding an investor or third party lender to shoulder the costs. Business.com suggests you get funding from:
- Friends and family
- Crowdfunding campaigns
- Angel investors
- Venture capitalists
- Accelerators
You can also approach banks or other lending institutions and apply for a business loan. As part of your application, you’ll have to provide complete documentation (i.e. identification, recent financial reports, your business plan) as well as details of your expansion, why it is necessary and what financial costs and revenue you anticipate. If successful, you will be required to pay interest on top of the loan’s principal value. Take these factors into consideration as interest charges add up during the course of your loan term agreement.
Another expense you need to consider is insurance. Unforeseeable events like theft, natural disasters, and damage due to renovation can put a huge dent in your business finances if you have to pay for recovery yourself. Even though these are unlikely events, having insurance for unforeseen circumstances can help you accurately predict and manage your overall budget.
Financial preparation is the key to success, without it, you’ll be risking a lot more and be less prepared for the changes to come.
3. How do I market my small business to more people?
Just because you are expanding, it doesn’t necessarily mean your sales will organically grow with you. Small business owners need to make a conscious effort to advertise their products or services and drive up demand. Your marketing methods should improve alongside your business’ growth and development.
You can increase your marketing reach through:
- Networking events -These allow you to get to know more people from your industry, reach out to potential customers, and build relationships with individuals who can market your business via word of mouth.
- Hosting events centred around your brand – This can include webinars, product launches, and award ceremonies. Events like these draw more people in and get them talking about your products and services.
- Social media promotion – Social media is a vital part of modern business marketing strategies. It allows businesses to interact with online communities, broaden their customer reach, and target customers who are interested in what they have to offer. This, in turn, can generate more leads through an inexpensive and convenient medium.
Businesses can also use social media to attract guest bloggers and affiliate marketers. The right influencers already have a large following of people who trust what they have to say, so getting them to share your products or services will increase opportunities for sales and can reach more potential customers.
4. Can my staff handle the workload?
Scaling often involves additional work. Because of this, it might be time to hire new employees to take care of the added workload rather than exhaust yourself and your current team
Delegating tasks is an essential part of growing your business. This can be difficult at first, especially when you’ve gotten so used to the way things are done; but letting go of some of your tasks and allowing your senior staff members to step up and handle different responsibilities will let you focus on more important aspects of the company.
You also have to make sure that there’s still a healthy and conducive working culture within the company. According to the Harvard Business Review, instilling the right company culture can help further inspire and motivate staff members to deliver good work. It’s important to maintain this by regularly checking in with your employees, establishing ground rules for them to follow, and rewarding them for good work.
You can also choose to outsource the work if you’re not ready to add more full-time workers to your team. Outsourcing work can help small to medium enterprises (SMEs) grow their business because they’ll ultimately save more when it comes to staffing costs.
At the end of the day, your employees are what keeps operations going, so it’s best to hire the right people for the job and take care of the ones you already have.
5. Who can I turn to for help or business advice?
One thing you’ve got to remember when scaling your business is that it’s okay to ask for help. There are business coaches and advisors available to help you through the process if you have questions or need guidance.
Look for a coaching program that works with small business expansion specifically, or that has a program for this as they will have the experience and advice that will boost your results. For example at Evolve To Grow, we have our Business Evolution Circle which is specific to addressing problems and providing tactical solutions for scaling a business. Make sure the company you go with has the experience needed to assist you.
There are plenty of social media groups and internet forums that allow you to interact with other small business owners, get tips on scaling, and discuss common problems. You can even subscribe to online courses and workshops with a professional business consultant to better understand the next steps you need to take.
Deciding to scale your business can be overwhelming to start with, but once you’ve outlined the benefits and gone through the questions you need to understand your business direction, you’ll find that transitioning from a small business to a bigger one can be a fun, exciting, and fulfilling endeavour.
If you’re interested in knowing more about scaling your business, you can join our Facebook group and talk with other like-minded small business owners for more tips and advice.
Tristan Wright is CEO and Founder of Evolve to Grow, a business consultancy that was created to provide significant opportunities for small and medium businesses around the world to grow their businesses remotely. Tristan is also founder of Seight Custom Cycling Wear, a cycling clothing company.
