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6 Factors To Consider And Apply Before Scaling Up Your Business
Viewed by 1,425 Smart Towkays
How much time should you spend on your business before scaling up? This question has always bothered most business owners. There are so many things to take care of, from marketing to sales to customer service. How do you decide where to put your focus?
Scaling up means growing your business into something bigger and better. If you want to scale up, you'll need to invest in new equipment or hire additional employees. The decision to scale up depends on several factors, such as your current resources, your goals, and your financial situation.
Before you start scaling up, you'll need some basic information about your company. For example, you'll need to determine whether you need to expand geographically, increase staffing levels, or add new services. Once you've decided what you want to scale up to, you'll need to evaluate your current capabilities and identify the skills you need to develop. Finally, you'll need to figure out how much capital you need to raise and how long it will take to get there.
Here are six key takeaways from companies to build upon that you may apply before scaling up.
Avoid Making Your Product Commoditised
If you're planning to scale up, then you probably have a consistent product or service that's already successful. You might be tempted to make it more accessible by lowering prices or adding features. However, this could lead to commoditisation, which is when customers see your product or service as similar to other consumer products or services they use.
This can happen if your product or service is too good at what it does. It's easy for people to compare your product with others because they all offer the same thing. As a result, they become less willing to pay extra for yours.
To avoid commoditisation, look for ways to differentiate yourself. For example, you could try offering different versions of your product or service, provide higher-quality materials, or give customers more choice.
You also need to ensure that your pricing strategy doesn't encourage price comparison. Instead, you should aim to set prices that reflect the value of your product or service.
Rule Of Thumb: Consider Your Market Size
The size of your market is important because it determines how big your potential customer base is. A large market gives you access to lots of potential customers. But a small market limits the number of people who can buy your product or service. So, before you scale up, you'll want to find out how big your market is.
The best way to find out is to conduct research. Talk to your existing customers, ask them about their experiences, and analyse your competitors' performance.
Once you know how big your market is, you can work out how much money you need to grow. You'll also need to consider how much time and effort it takes to reach each target market segment.
For example, if you sell software, you might need to think about how much time it would take to train each person who uses software.
Importance Of Your Misson And Vision Statement
Your mission statement describes why you exist. It tells your customers why they should choose you over your competitors.
A vision statement defines where you want to go. It shows your customers where you want to take them. These statements help you communicate your values and priorities to your team members and stakeholders. They also help you define your brand identity.
When you write these statements, keep them short and simple. Don't include any jargon or buzzwords.
When writing your mission and vision statements, focus on describing the benefits your business provides rather than focusing on the problems it solves. This helps you stand out in an increasingly crowded marketplace.
The Skills Needed For Your Employees To Scale Up
Before you decide to scale up, you'll need to assess your employees' current skills. What are the most important skills they need for your business path to success? Do your employees have enough experience to handle the challenges involved?
If not, you may need to hire new employees or partner with someone else who has the right skills.
Before you start scaling up, you'll also need to think about whether you need additional training. For example, if you plan to add new functions to your product or service, you'll probably need to retrain your staff.
This means that you'll need to make sure that everyone understands the changes you're making. If you don't, you risk losing customers.
Also, be aware that scaling up will require you to change the way you do things. This includes changing internal processes, procedures, and business systems.
It's important to note that this process isn't easy. In fact, it can be extremely stressful.
So, before you begin scaling up, you'll need a clear idea of what you're trying to achieve. By doing so, you will figure out how you can build on your competencies.
You'll also need to understand the risks involved. Are there any hidden costs? Will your products or services become obsolete?
Strong Branding And The Use Of Social Platforms
To succeed at scaling up, you'll need to develop strong branding. This involves creating a unique image for your company.
Think about what makes your company different from its competitors. How does your company stand out? What are your core values? Why should people buy from you instead of your competitors?
These questions will help you create a compelling brand message.
Once you've developed your brand, you'll need to ensure that it is consistent across all channels.
For example, if you use social media marketing, you'll need to post similar content on Facebook, Twitter, LinkedIn, Instagram, etc. Similarly, if you offer a subscription-based service, you'll need to provide the same level of customer support regardless of which channel you choose.
In addition, you'll need to make your website more user friendly. You'll need to remove unnecessary features and improve navigation.
Finally, you'll need to invest time and money into developing a strong online presence.
Your goal here is to attract potential customers. So, you'll need to optimize your site for search engines like Google and Bing.
As mentioned earlier, these tools can help you reach a wider audience.
However, you'll still need to market your business offline. This means that you'll need print ads, flyers, brochures, and direct mailers.
You'll also want to consider hiring a public relations firm to promote your business.
Cash Management Is Key For Your Business Success
When you first launch your business, you won't have much cash flow. But as your business grows, you'll need to manage your finances carefully.
The cash conversion cycle comprises four stages for any businesses. These include sales, billing, receivables, and inventories. You must determine the steps you can affect as well as the procedures involved in each stage. Cash flow may be aided by reducing the length of any of these steps, thus it is crucial to carefully consider what is feasible.
Note: It's critical to determine whether the transaction results in a net benefit or loss by computing the cost of late payments from customers.
So, before you start growing your business, you'll need to set aside some funds for future growth.
This way, you'll have enough capital to scale up when needed.
Scaling up your business isn't easy. However, with the right planning, you can achieve success.
Remember, it takes time to build a successful business. So, don't expect overnight success.
Frequently Asked Questions
How do I find good employees?
We're sure you have heard the saying, “You can’t find good employees. You have to make them come to you!” This is true in some cases, but not all of them. In fact, there are many ways that employers can attract and retain great talent. The key is to know what works best for your company and then do it. Here are five tips to help you get started.
1) Hire People Who Are Passionate About What They Do. If someone doesn’t love their job, they will leave after just a few months. 2) Make Sure That Everyone Has A Clear Understanding Of Their Role. 3) Give Them Opportunities To Grow. 4) Provide Training And Development. 5) Be Open With Communication.
What should a startup spend its first year on?
A startup should spend its first year on marketing, customer acquisition, and product development. Once those three things are done, the company can focus on scaling up.
Should I incorporate my business?
Yes. Incorporating your business gives you certain benefits. First, it provides legal protection against lawsuits. Second, it allows you to write off expenses related to running your business. Third, it makes it easier to raise money. Finally, incorporating your business gives you access to more resources.
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