Many businesses don’t realise the difference between ‘growing’ and ‘scaling’ a business. Any business can grow, which essentially means increasing capacity and operations along with revenue, but coupled with an increase in overall cost to make the business earn more.
Scaling, by contrast, is when revenue grows at a much quicker pace than expenses, making it much more efficient and profitable.
Here are some things to bear in mind when considering if your business is ready to scale:
1. Are you ready to scale?
From experience, we know that it’s when a business begins to scale that any cracks begin to show. A bulletproof foundation is paramount when considering this next step, as is ironing out any issues beforehand, as they cannot always be rectified once the journey has begun.
This could be anything that effects the efficiency and productivity of your business: is your IT system functionable and able to handle the increased workflow? Are there any weaknesses in your supply chain? Do you have any issues with cash flow? You’ll need to consider every element of your business and address any problems in preparation to scale up.
2. Look forwards
Think about where you want to be in a year’s time. Do you want to increase your turnover by £1m? £5m? £10m? Whatever your goals, changing your mindset is crucial for moving your business forwards: if you want to be a business with £5m annual turnover, you need to start thinking and making decisions like one.
This change in mindset is understandable difficult to manage, but is arguably one of the most important things when scaling a business. Scaling requires a lot of flexibility, problem-solving and the ability to bounce back from obstacles along the way, and having the self-belief to cope with these challenges can be the ‘make or break’ factor in your scale-up journey.
3. Don’t be afraid to ask for help
Scaling is all about improving efficiency, and this looks different for every business. However, it usually involves delegating to people who are more knowledgeable than you and outsourcing various things, leveraging the right people and technology to allow you to work on the business, rather than getting caught up in the day-to-day matters inside it.
As your business grows, you’ll need to confident and trusting enough in your team to hand over some elements to people who know more than you – you can’t do everything yourself!
4. Focus on the customer
It’s a well-known fact that gaining a new customer costs 5 times as much as retaining an existing one, and this is always something to bear in mind. As you begin to scale, try not to lose sight of that made you successful in the first place; keeping your customers happy and satisfied should be at the core of what you do.
Staying abreast of what your customers want should stay high on your list of priorities: make sure you are continually doing your research and creating buyer personas so that you are targeting high value audience segments. This will help you direct your money to where you will get the biggest ROI.
If you feel your business is ready to take the next step, Growth Platform have a range of measures to support ambitious businesses in the Liverpool City Region.
The LCR High Growth Programme is specifically designed to support high growth (or high growth potential) businesses in the Liverpool City Region to adapt, innovate, and grow; get in touch with one of our account managers to see how we can support you and your business.