Every entrepreneur is waiting for the moment when they can scale up and take their business to the next level. When a small business gets real traction, and leads start to pour in faster than you can accommodate their business, it’s tempting to take the bull by the horns and grow explosively. Unfortunately, that can turn out to be a treacherous instinct.
Making the switch from a small to a medium sized business is a big step. Not only is the process of scaling expensive and risky, it’s also difficult to manage internally. While small businesses can operate flexibly under the watchful eye and direction of the business owner, bigger enterprises rely on more complex procedures and power structures to keep operations running smoothly and clients happy.
Scaling up successfully is about preparation, and needs to be done methodically. As a business owner, you need to organise and finance the logistical hurdles of ramping up production, while also altering your own role in your business and transforming how your business is structured.
1. Transform your leadership role
Small business owners wear many hats. They might manage financial paperwork, drive sales, oversee marketing campaigns, and still make time to get involved in the production process. This gives them a lot of personal control over their business, and keeps costs down. As your business grows, this kind of leadership becomes impossible, and these direct management tasks need to be devolved to managers.
Instead of working in your company, you’ll need to begin working on behalf of it. Leaders of bigger businesses need to focus on the business as a whole, and define its interests and vision for the future. This is a critical part of ensuring that your business has direction and an identity to define it and keep it moving forward.
2. Establish exhaustive procedures
Sit down and establish thorough procedures detailing exactly how different departments will interact with each other and clients, and how all the various jobs in your business should be done. Your business should be able to operate and resolve problems without any significant intervention on your part.
Rigid procedures make businesses less flexible than small startups, but that doesn’t make them any less essential. Once a business grows beyond a certain size, it will cease to be practical for employees to maintain communication with everyone that relies on their work, or who they rely on. Because of this, operations need to be systematised in a way that allows various employees and departments to work together smoothly without spending an enormous amount of time coordinating their efforts on a daily basis.
It’s dangerous to begin scaling before these procedures have been properly established. If employees and middle managers don’t have the proper guiding materials to work with, the entire system begins to break down. Departments won’t get exactly what they need from each other, attempts to solve individual issues will cause backlogs and inefficiency, and your clients’ service experience will deteriorate.
3. Get financially prepared
Scaling your business up is expensive, and you’re going to need a lot of capital. You’ll need more space, new equipment, more employees, and time and resources to train those employees. That means exploring and carefully evaluating financing options.
Financing rapid growth is a big commitment, so it’s a good idea to find and work with a finance professional. Your ideal solution might come in a variety of forms, from regular business loans, to equity financing, to various hybrid options, to non-traditional methods like crowdfunding. There are a lot of options available, and it’s difficult to determine which will be best for your particular business without the aid of an expert.
4. Prepare your network
Waiting to be a big important industry leader before you build your network is putting the cart before the horse. Business is about relationships, and those relationships help to make growth possible and stable. Connections translate into opportunities, whether they be opportunities for investment, financing, employees, resources, partners, or information. By building and developing these relationships early, you’ll have more opportunity to strengthen and take advantage of them as you begin to scale up.
The more connections you can access, the more flexibly and effectively you’ll be able to respond to challenges. Before you pull the trigger on your growth plan, you need to make sure that you have the network you need to make it a success. Make sure that industry experts, suppliers, and investors know who you and your business are.
Growth is a complex and multifaceted process, and it needs to be approached carefully and with intent. Your business’ successful transition into this bigger-business environment hinges, in large part, on how well your business and you personally can prepare in advance.