Evaluating and Scaling Your Business

Scaling a business is exciting yet challenging. It requires careful evaluation of various aspects to ensure sustainable growth and long-term success.

To succeed, leaders aspire for instant success, but real scaling requires a durable, long-haul business strategy. Regardless of your business’s size, taking actionable steps is crucial for achieving goals.

What is Scaling A Business Mean?

Scaling is often confused with growth, but they differ significantly. Growth involves increasing revenue while adding resources, like staff and technology. Scaling is about growing more efficiently and generating higher revenue without proportional resource increases. According to McKinsey, only 22% of new businesses successfully scale.

Scaling a business is about creating the conditions for unhindered growth. It involves planning, funding, and establishing the necessary infrastructure, personnel, processes, tech, and partnerships.

Common scaling mistakes include:

• Growing too fast.
• Focusing on short-term gains.
• Losing focus.
• Hiring quantity over quality.
• Neglecting efficient processes.
• Lacking agility.

Successful scaling considers all aspects of an organization, including:

• Company Goals: Balancing short- and long-term goals is crucial. Prioritizing short-term goals may lead to rapid scaling without considering long-term infrastructure needs.

• Team Size: Prioritize quality over quantity rather than assuming a direct correlation between revenue and team size. Skilled leaders and specialized talent are more valuable for sustained growth.

• Internal Processes: Implement standardized, efficient workflows and automate repetitive tasks. Documented processes streamline operations and facilitate onboarding new team members.

Scaling demands strategic planning and flexibility to pivot strategies based on market changes or customer needs.

10 Steps for Scaling a Business

Successful scaling strategies share common best practices. Here are the ten essential steps for building a winning scaling strategy:

Step 1: Assessing your current position

Before embarking on any scaling efforts, it is crucial to assess your current market position. Conduct a comprehensive analysis of your strengths, weaknesses, opportunities, and threats (SWOT) to identify areas for improvement or potential expansion. 

Consider threats and external opportunities that could impact your business. This is critical when scaling up, ensuring preparedness for the effective route. For instance, an opportunity might involve accessing funding, while a threat could be the impact of a pandemic and its potential business restrictions.

This evaluation will help you determine the right strategies and actions to take.

Step 2: Plan and strategize how to increase sales

Strategize for sales growth and consider the impact if orders suddenly double or triple. Creating a comprehensive plan will ensure your organization can handle such a surge without setbacks.

Start with a detailed sales growth forecast, specifying new customers, orders, and revenue every month. Similarly, forecast expenses, accounting for technology, personnel, infrastructure, and systems required to manage increased orders. 

Assess how each item on your current profit and loss statement might be affected and anticipate the rise in expenses. Detailed spreadsheets for both sales and expenses will make your plan more realistic and effective. Investing effort into precise cost estimates will significantly enhance your planning process.

Below are the best practices to grow your sales:

• Focus on a specific target market.
• Understand customer behavior
• Address customer feedback  
• Build a skilled team of sales representatives
• Create a successful marketing strategy
• Utilize CRM software to handle leads and customer relationships
• Refine your message

Step 3: Find the money

Scaling a business involves investments: hiring staff, adopting new tech, expanding facilities, and implementing reporting systems. Securing funds for this growth is essential. While self-funding is a solid strategy, it often takes years. 

Consider small business contests, like the FedEx Small Business Grant Contest, which offers a $25,000 grant and $7,500 in FedEx Office® services. Additionally, explore bank funds like loans or lines of credit to expedite growth. Begin by calculating your financial needs and promptly seeking opportunities.

Step 4: Secure the sales

Scaling your business relies on increased sales. Assess your sales structure comprehensively:

• Is there a sufficient lead flow to generate the desired number of leads?
• Do you have effective marketing systems to track and manage leads?
• Are there enough sales representatives to follow up and close leads?
• Do you possess a solid system to manage sales orders?
• Are billing and receivables functions in place for timely invoice collection?

Step 5: Invest in technology

A global study by Automation Anywhere revealed that workers spend roughly 40% of their day on manual administrative tasks. Automating these tasks frees up time for team members to focus on broader business goals and priorities, which is crucial for scaling a business.

Consider technology investments to automate tasks like team member onboarding, accounting, CRM, project management, and appointment scheduling. When choosing technology partners, compare usability, customer service, implementation timelines, and costs.

Standardizing business processes through technology and clear instructions streamlines scaling efforts and supports team building.

Step 6: Expand your team 

While technology provides advantages, human involvement remains essential. When planning your team for business scaling, start by identifying the skills needed to achieve your goals and pinpoint any gaps in your current team.

Consider specific hard skills (technical and measurable) like coding, business analytics, or graphic design, along with soft skills (adaptability, communication) crucial for success.

Leadership skills such as active listening, problem-solving, and delegation are also vital for guiding the team toward your business objectives.

Step 7: Get external help

In the early growth stages, small teams often handle various roles, but relying on everyone to handle everything can lead to mistakes and exhaustion as you expand. Bringing in specialized experts as you scale can improve efficiency.

Hiring full-time specialists might be costly if they’re not needed full-time. Many businesses opt for independent professionals. Last year, 78% of companies used independent professionals, and 47% plan to use them more in the next two years.

Instead of waiting for budget approvals to hire full-time staff, independent professionals work on a per-project basis, offering flexibility in costs compared to fixed full-time expenses. This approach enables efficient scaling, reducing costs, enhancing productivity, and fostering business agility.

Step 8: Set achievable goals

To effectively scale, strike a balance between ambitious yet achievable goals. Unclear or unattainable targets can demotivate teams. Align leadership on goals and communicate the plan to involve and energize the entire team.

For instance, aiming for a 50% sales increase in a year requires breaking it into manageable monthly or quarterly milestones. These should guide individual efforts, such as prospect meetings based on historical sales data.

In planning, account for seasonal fluctuations, such as slower periods during summer. Engage experienced business planners to prepare a scalable business plan.

Step 9: Improve Management Skills

Managers drive team motivation and outcomes, influencing scalability. Identify vital skills—critical thinking, time management, leadership—necessary for scaling, whether through staff development or new hires.

Step 10: Focus on the company’s offerings

Growth-focused companies cast wide nets for revenue, risking long-term scalability. Scaling demands a focused approach to products, services, and target markets, aligning with core customer needs and industry expertise.

Focus strategies:

• Assess strengths and weaknesses
• Carve a niche for your offerings
• Determine your total market reach
• Analyze competition and customer challenges
• Adjust solutions to solve customer problems.

Adapt and evolve offerings continuously to sustain long-term scalability and competitive advantage.

Here are the ten steps to evaluate and scale a business. Have you faced any challenges while scaling your business?

Evaluating and Scaling Your Business FAQs