Scaling a business refers to growing a business in a way that increases net income while keeping long-term expenses at current or more efficient levels. It is an important idea because growing “out of control” can be catastrophic for a small business. Thus, knowing when and how to scale is crucial for a small business owner.
There are many signs that it may be time to scale your business, but three are enormous signals that you should scale the business now.
- You are turning down business opportunities due to time constraints
- You have consistent sales and strong cash flow
- You are meeting and exceeding your business metrics faster than expected
How to scale is a vast topic, but there are some simple starting pieces of advice that all small business owners can utilize. First, small business owners are used to doing many different types of tasks and wearing many hats at once. To scale your business, analyze and document all the tasks you are doing each day and, most importantly, which ones you are the best at. Maybe you have to do bookkeeping and cleaning and hate it, yet you love the sales process and happen to be great at it.
You should look to bring on an employee, even if just part-time, to take care of the tasks that you dislike, aren’t good at, and are wasting your time performing. Have the new employee handle those so you can focus on creating business growth through the actives you are great at and enjoy. Set up performance metrics and clear duties for that employee, and get going. See how much you can improve your business in the next quarter. If you reach your goals, clearly the employee and this initial step in scaling the business is working out.
Overall, keep the scaling process simple, and take baby steps. Don’t attempt too much at once, and make sure your business is meeting the above bullet points first. Otherwise, you aren’t ready to scale yet.