All businesses need to grow, but at what pace and how quickly should they scale that growth? These questions intrigue (and sometimes torment) business owners, because there’s no single “right” answer and so many variables are involved.
There are powerful reasons to strategically grow your business. “The primary reason to scale a business is to increase profitability,” notes The Balance Small Business, which lists other compelling benefits of growth:
• Gain access to a broader range of financing options.
• Increase sales and other revenue-generating opportunities.
• Expand current product lines and launch new offerings.
• Relocate the business to a more profitable geographic location.
•Attract more high-quality job candidates to open positions.
At the same time, obvious risks come with rapid growth. According to Jim Morris, President and Owner of The Alternative Board Tennessee Valley, pitfalls include “growing faster than the business can fund itself and avoiding poor customer service.” It’s vitally important, Morris adds, that a business owner “create a strategic plan, with projected budgets, to avoid surprises and provide a baseline of what to expect and a plan that can be measured against and adjusted as growth occurs.”
To avoid these and related pitfalls, here are five tips on effectively scaling business growth:
1. Standardize your business processes.
Businesses that don’t plan for growth often end up “reinventing the wheel” when it comes to operations and processes. A company that successfully standardizes processes, on the other hand, can adapt more quickly to growth because operations are conducted in the same manner at all times, employees are equipped with appropriate information and skills to handle growth challenges, and a “process map” is set in place to guide the team towards desired outcomes.
2. Know where funds for growth will come from.
A business must know if it can effectively fund itself throughout the growth process. To achieve this goal, “the business owner should do a cash flow and working capital analysis to determine if the business can fund itself adequately,” notes Jim Morris. This includes “financial preparation and knowledge of both current and future [financial] needs” in terms of expenses related to growth.
Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more
DOWNLOAD3. Don’t lose sight of your unique selling proposition (USP).
Businesses that fail to successfully scale for growth often lose sight of what made them attractive to customers in the first place. Whatever your USP is, you can’t grow effectively if you “attempt to market a product or service that hardly anyone wants, needs or understands.” As part of your strategic growth plan, make sure the USP that’s worked for you thus far is incorporated into new marketing campaigns, plans for relocation, new product launch, etc.
4. Keep hiring and promotion strategies in mind.
Plans to scale your business for rapid growth should always include an in-depth communications strategy for employees. One likely scenario, according to CoverWallet, involves hiring a new crop of employees to meet increased demands while more experienced employees “become the supervisors or managers of their team [who] ensure that subordinates are well trained in operations.”
Maintain ongoing communications with your team. Make sure they understand the scope of your growth plans and their own roles within that plan. Just as importantly, don’t stint on giving them the resources they need to meet the challenges that come with business growth and expansion.
5. Never lose sight of your customers.
It seems hard to imagine, but businesses “swept up in a frenzy of growth sometimes neglect the very customers who helped them get there.” No matter how much focus and resources you apply to other aspects of growth, keep a close watch on the quality of your products or services and on maintaining the highest level of customer service possible. In the early stages of accelerated growth, having a satisfied customer base is absolutely crucial.
How can you get the capital you need to fund your growth strategies? Download our free TAB whitepaper, “Best Ways to Secure Capital for Your Business” for great financing tips and guidance.
