Did you know that less than half of all small businesses make it to their fifth anniversary? And of those failed businesses, two of the top three reasons were poor planning, bad management, and leadership skills in the early years.
If you’re concerned about the sustainable growth and success of your small business, then you might be wondering if it’s time to scale your business. Don’t worry because you’re in the right place. Keep reading to learn the six sure signs it’s time to scale and what to do if it is time.
1. Reliable Sales Process
Whether you sell a physical or digital product or provide a service to your customers, you need to master your sales process before you can scale. Once you’re reliably and consistently converting new customers, you’re ready to scale your small business.
In addition, repeating business from current and previous clients gives your organization financial stability. And as you’ll see in a later sign that it’s time to scale your small business, financial stability is vital as you begin to expand.
If you’re wondering if it’s time to scale, your first assessment should be your sales process. Is it fully automated, and are you consistently bringing in new customers every day? If so, then let’s move on to the second sign to see if your small business is ready to branch out.
2. Slower Growth Than Usual
The second sign you should look for is your business growth pattern over time for sustainable growth. You’ve likely gotten used to hitting higher goals consistently each month, quarter, and year as you build your business.
However, once you start hitting a bottleneck in delivery, you’ll start to see slower than expected sustainable growth. This slower sales growth is a sure sign that it’s time to scale. So take the time to assess the big picture and why your sales growth has slowed down to ensure that it’s not due to market concerns or lack of quality delivery.
If you can see that your process is working smoothly and your customers are happy with your product or service, your slower growth may be due to constraints. If this is the case, then it’s time to grow your operations to keep up with demand, our third sign that it’s time to scale.
3. Turning Away Potential Clients or Customers
If you’re not able to keep up with demand, there is likely a bottleneck in your delivery process. This bottleneck will limit the number of clients you can take on or the number of products you deliver.
Your number one goal was to find and retain new business in the early years. However, eventually, you’ll reach a plateau where you won’t need to focus as much time on finding customers, and instead, you can focus on providing your product or service.
Once your marketing has reached this level, your new hurdle will be delivering your product or service. And eventually, you’ll find yourself turning down new customers because you can’t consistently keep up with demand.
At this point, it’s time to start outsourcing or hiring team members so you can duplicate yourself. If you’re turning down new business, it’s time to start delegating tasks to replace yourself as the person delivering to your clients.
4. You Have a Reliable Infrastructure in Place
You are ready to scale if your infrastructure, including your best talent or team, is dialed in and reliable. If your business model or process isn’t steady and your workflow isn’t streamlined, you won’t be able to keep up once you do scale. Be sure this sign is securely in place before attempting to scale your small business.
Too many small business owners get a few big sales or sign a few big customers and decide to start to scale their team and processes. However, you’re doomed to fail without reliable internal processes in place.
You’ll lose whatever new customers you gain when you scale without a solid foundation. So instead, minimize risk by ensuring that your processes are in place and dialed down.
5. Your Cash Flow Is Strong and Reliable
Too many small businesses go out of business due to a lack of funding. Don’t let your new business become one of these statistics. Instead, take the time to ensure that your cash flow is consistent and reliable.
We understand that you don’t want to wait too long to grow your business to the next level. But you also don’t want to rush into scaling after one or two large sales or signing one large client.
If that one sale or client were to disappear tomorrow, would you be able to replace it quickly and easily? If not, then you’re not ready to scale. As the cliche goes, you want to work for the best but plan for the worst. This is especially true when considering your cash flow.
Profitability is important, but you need to be more than profitable if you want to scale. You need to be able to show future revenue clearly and that it will cover the new costs associated with scaling your business.
6. You Have a Clear Vision and Business Plan
You can’t take your business to the next level if you’re not crystal clear on your goals and what that next level entails. You need to know your exact goals, and what your game plan will be, once you do scale your business.
Another thing to consider is your core values. Your employees should share at least a few of your main values. Some of these core values may include enthusiasm, positivity or a success mindset.
Take the time to outline your goals and then communicate this vision with your employees. As the leader of your business, you must see your vision clearly and share that with your team so they can embrace where your company is also going.
Once you know where you’re going, write down a plan to get there. As you begin to scale, you can’t be everywhere all the time. So, if your team has a question about the next step, they need to be able to consult the written plan rather than wait to ask you.
If you have a clear vision and business plan written out and shared with your team, you’re ready to scale your business to the next level.
More Tips for Scaling a Business
Focus on where you’re going, not where you’ve been. You must take the time to step out of the daily operations and spend time with your vision and business plan. Without these, you’ll struggle when you begin to scale your business.
Our second tip is to build up your team. You will need a quality team in place if you want to scale your business. When you scale, you will remove yourself from delivering your product or service and replace that with your team.
This will remove the bottleneck of production when everything relies on you. However, you’ll find it impossible to let go of the daily operations without a quality team. So invest in your team by compensating them well and encouraging and training them to do their jobs well.
Finally, assess any barriers that might limit your ability to scale. These barriers could be roadblocks in the market, limited capital, or a lack of tools or systems that your employees need to succeed.
How to Expand Your Business
As you start to recognize the signs above in your business, it’s time to start learning how to scale a business. Of course, you’ve spent years learning how to grow your business. However, growing business and scaling a business vary widely, even though these two terms can be used interchangeably.
When growing your business, you start by looking for and attracting more clients or more customers. However, as we saw in signs one and three, you’re now in a place of turning down new clients because your sales process is so streamlined.
As you start to scale, you’ll need to assess your processes, systems, and who will do the work. As a small business owner, when you scale, you’ll start to move away from the day-to-day delivery of your product or service, you will delegate tasks more, and your employees will take on these responsibilities.
Once you start to see the bottleneck in signs two and three, you’ll need to look at how automation and outsourcing can help you begin to escalate your process allowing you to scale down the road.
7 Steps To Scale A Business
Here are our simple steps of how to scale a business:
- Start with your vision
- Create your business plan
- Automate your processes
- Assess the market and your audience
- Expand your network and begin to attract new audiences
- Train your staff to be more productive
- Shore up enough capital to successfully scale
When you were in the startup phase, you likely wore all the hats in your business. Now that you’ve begun to recognize the signs above that it’s time to scale your business; you’ll need to adjust your focus.
Note in the steps above when you remove yourself from the daily operations, and instead, your focus is on optimization, automation, and delegation you will most likely increase sales and bring in more money as well as having the benefit of saving time.
Now You Know When to Scale Your Business
If you see the signs above in your business, then you’re ready to move forward with growing your business. Now you can stop wondering should I scale my business, learn how to scale a business, and get started scaling to the level you’ve always dreamed about.
If you’re ready to achieve new heights in your small business, we can help you and show you how to scale a business. Working with Dean Mercado will give you the clarity to scale with ease.
Reach out to us today to see how we can help you successfully scale your business.