Scaling and Growing Your Business – 10 Factors to Consider
Starting a business is a bold move but growing it is just as audacious. If you have plans to grab a larger slice of the market, what do you need to consider?
Companies House predicted that 2020 would bring an influx of new companies, with over 85,000 new businesses expected to be registered against the backdrop of Covid redundancies. 8 in 10 of these businesses won’t survive their first year, however. According to the Office of National Statistics, just over 40% of new businesses survive beyond their fifth birthday.
There are commonalities in the reasons why new businesses fail, as there are why established high street names suddenly disappear under the weight of debt. One factor is scaling and growth – grow too fast and your business can ‘run away’ or grow too slowly (or not at all), can also leave a new business floundering.
Scaling or growing a business – what’s the difference?
The terms are often used interchangeably and it’s easy to understand why – superficially, you could argue that they both mean the same thing. There is, however, a distinction between the two when it comes to business and it is important to understand the difference between the two:
· Growing a business – think of this as adding new and more resources to a business so that it grows, whether that is a larger office base to accommodate more staff or a significant investment of cash.
· Scaling a business – effectively this means doing more with the same level of resources. For example, sending an e-newsletter to 1 person uses the same time and effort as sending it to 1,000 people or 10,000 recipients. Scaling is the business growing into itself.
A virtual assistant can be the bridge between scaling and growing. We can help you do more with what you have, effectively adding hours into the business. It may be that at some point in the future, with revenue building, you attract investment which leads to growth in people, capital and other resources.
Understanding if your business can scale any more than it has is an important consideration before you leap forward into growing it. If you do want to grow your business, what do you need to consider?
#1 Think like a bigger business
If you continue to think in the same way and do the same things, you’ll get the same outcome. In other words, if you want to expand from a small company with £25k turnover to a business with £1 million turnover, you need to think like one.
Your objectives need to be clear and in line with the thinking of a larger business. The decisions you make as a bigger business will be different to those you are making now. How will you adjust your thinking?
#2 Be prepared for growth
As your business scales and grows, it will start to make different noises. Things that were solved easily now take a little longer, with more people involved. The computer system, for example, that has served you well thus far now starts to ‘run slow’ under the strain of more people, more programs and more hardware.
Everything needs to be considered from cashflow to IT system, to phone systems to supply chain issues. You need to think through all aspects that will be affected by your business growing, and how you can be prepared to solve issues before they become a huge problem to solve.
#3 Learn from others
All companies and organisations have a story to tell including how they started to how they became the national or international empire that they are. Hidden in the story will be the journey that they took, both planned and unplanned. Take a look at both your competitors and other businesses to see what they did. Did their growth rely on investment, for example, or did they respond to a need in the marketplace or did they create the demand?
#4 Protect your brand values
You started your business with a vision in mind. Your principles will inform the brand values. You will have made decisions, unconsciously and consciously, on how customers will be treated for example, or what kind of workplace environment you want to create. Growth can minimise and dilute some of these values, especially as more people are brought in and you stop making ‘the everyday decisions’. Make sure you don’t lose these brand values or success will feel empty.
#5 Talented people
One of the biggest changes to a business as it grows is the people. You may have started your business, on your own, from the spare room of your home. Within a year, you may be working with a virtual assistant and other freelancers but eventually, you may decide that employing people is the right move. When you reach this point, be clear on the talents you are looking for and the people who will help your business excel in its field. You’ll also need to decide how you will motivate, recognise and reward their efforts too.
#6 You need a staff manifesto
A super-strict regime is sometimes needed in large corporate bodies and you may not feel this is the right way to go for your business. But here’s the thing: a hands-off approach takes a lot more effort to maintain and manage than one where there are basic rules and ‘ways of doing things’ in place. Just as employing the right people is important in business growth so too is the right attitude. Everyone needs to pull in the same direction, and so a staff manifesto works in setting out the how, why, when, who and where of staff involvement.
#7 Work with expert partners
Collaborating is far better for business growth that cut-throat competition. If you can feel the business needs something extra, but not sure what it is, look to outside help. That could be a business advisor, a business coach or an expert from a specific field such as IT.
#8 Don’t compromise on the things that matter
Quality and consistency are enablers of business growth. Letting one or both slip will mean your customers will go elsewhere. The right processes, culture and staff will stop this from happening. There will be mistakes as you grow and so understanding why they happen and learning from them will bolster growth. The important lesson is not to repeat them!
#9 Identify barriers to growth
There are and will be many hurdles. And you must know what they are. These are the pain points that will take time, effort and, in some cases, money to get over. Every business has economies of scale and when you reach the top of the curve, you can either have to fall back into or push forward to the next economy of scale curve.
Knowing what the barriers are mean you can come up with solutions. Common barriers are weak cashflow (improve it with a bookkeeper with a keen eye for credit control), being in a workspace that is too small or the wrong location, lack of funding, lack of leadership skills…
A SWOT analysis along with a PEST analysis can help identify internal and external barriers, as well as potential solutions.
#10 Get a crystal ball!
One thing about being in business is that there is rarely an endpoint. You’ll constantly be looking forward to the next product, the additional features products and services customers will want and how your business can grow, develop and push into new markets.
It isn’t a crystal ball that you need, but an innate understanding of your business, the market and your customers, as well as how external and societal factors will affect demand and growth. As well as setting and following trends, seeing into the future also means you can take evasive action, moulding your business into a new model to be ready for the changes that are coming its way.
“Businesses fail because remedial actions weren’t made early on, suggesting a lack of regular, daily and real-time monitoring.”
Monitoring key aspects of your business are key because the signs of ‘something isn’t right’ are often there to read well before the crunch point. Poor finance control contributes to poor business performance and yet, it is often left to its own devices for too long. Having a clear, real-time overview of finances all the time is key, with daily monitoring of cash flow is essential, whether you are turning over £1k a year or £1 million.
Further reading: Growing your business
For more information on growing a business, take a look at:
Harvard Business Review – The Five Stages of Small Business Growth
Richard Branson – My Four Tips on Business Growth
UK Government – Growing Your Business
Small Biz Trends – Things to do to Grow Your Small Business
