How to Know When It's the Right Time to Scale Your Business
Entrepreneur's New Year’s Guide
As the managing director of Bubblegum casting, I understand the unique challenges of scaling a business.
High demand is great, but one of the biggest pitfalls for new companies is the inability to keep up with growing demand. Before you know it, you've lost customers, vendor relationships, and the hype surrounding your company.
Businesses must be ready for growth, but how do you scale your business?
Scaling is simply a plan to support and sustain business growth, but time, planning, data, execution, and proper tools are everything.
In this post, you'll learn five critical identifiers for scaling and how to get it done.
Use data to identify scaling opportunities
Stop what you're doing. If your company isn't actively gathering, managing, and leveraging data, you're setting yourself up for an uphill battle. Data reveals the best time to scale, future outlooks, and insights on what you need to achieve effective growth.
We leverage at every stage of scaling, from identifying opportunities for growth to creating processes to better serve clients.
Related: 15 Ways to Grow Your Business Fast
The first thing we do is evaluate future projections, current capabilities, and the infrastructure capacity for growth. Successful scaling requires resources, and only data analysis can reveal the amount of overhead, equipment, services, budget, and hours you need to meet projections.
Growing demand isn't the only decider of growth either. When I took over the agency, I wanted to drive growth and create demand. So we used data analysis to craft a growth strategy to increase brand accounts and talent acquisitions. Our analysis also helped us identify an area that was perfect for growth and led to us establishing our editorial photography service. This was a real win for us as we already had the resources and equipment in place to manage and run this new service easily.
Conduct a proper audit of your company. Do you have enough resources to triple the number of client accounts by 2022? Data analysis reveals your strengths, weaknesses, and areas for improvement.
Leverage analytics tools to craft data-driven sales forecasts. Consider the number of new clients, orders or accounts, and revenue you want to generate within a particular time frame. Compare these goals to the amount of capital you'll need to achieve growth.
Remember to remain realistic in your scaling goals; biting off more than you can chew could run your business into the ground. Work with your accounting department to stay within budget as you brace yourself for rapid growth.
Is it time to optimize your sales and marketing departments?
Do you wince at the thought of spending money? I understand this feeling all too well. However, as the wise Titus Maccius Plautus once said, you have to spend money to make money.
He's right, but it's not just the amount of capital that matters; it's how you spend it. The right investments are crucial to growth.
Businesses with skyrocketing demand, brand new startups, and struggling companies must optimise sales and marketing strategies to effectively scale at any stage.
Work with your accounting department to make room for the following sales and marketing improvements.
For example, let's say you need to increase employee overhead to boost quarterly sales goals by 50%. This is a telltale time that it's time to scale.
When you're in a rush to grow sales, it's easy to rush the hiring process. Likewise, sudden high demand can also lead to rush hiring decisions. Unfortunately, rush hiring can kill your growth strategy.
You need a talented team that meets demand but also drives demand further. Look for experienced sales professionals with proven track records. Calculate the average revenue per employee to see where your company can improve.
Another option is to craft an optimized sales strategy to train new employees. This is a great strategy for entry-level staff. Set targets for employees and implement incentives for reaching targets.
Lead generation and marketing optimization
Are you generating, capturing, and nurturing enough sales leads? If you want to drive leads, your company must be ready to scale. You need the capacity to handle an influx of new prospects, identify the best conversion opportunities, and nurture leads.
Remember, lead marketing and sales go hand-in-hand. Ensure you have talented marketers ready to go, along with sales pros. These departments should be working together and aligning goals for maximum growth.
Work with your marketing department to develop a targeted strategy that converts leads into clients. Depending on your industry, you'll likely need a combination of email marketing, outreach, social media, incentives, and website optimization to convert leads. This means you have to increase your marketing budget.
Remember to leverage data analytics to track, monitor, and assess marketing campaign results. Campaign analysis saves you from costly mistakes on future campaigns; plus, you can identify ways to improve campaign efficiency.
Work with payroll and accounting to ensure you're keeping up with growing overhead. This is important to remember during peak sales seasons.
Scale your business after going viral
Did your company recently go viral on social media? This is another surefire sign that you need to scale, and scale quickly.
Viral campaigns can spur incredible demand overnight! Many small businesses don't have the inventory on-hand to keep up with the first influx of orders.
Talk to your financial institution about receiving a fast infusion of cash to fulfill future orders. This is also a good time to think about outsourcing to keep up with growing demand.
Going viral is a whirlwind, but don't let the social media hype die down. You want to milk every last second of it. Increase your social media marketing budget to create more campaigns that can piggyback off your recent success.
Are you enjoying steady profits?
Profitable businesses are in a perfect position to scale so take this opportunity to learn about the latest technology and services for growing companies.
Gone are the days of manual processes. If you want to scale your business, you have to embrace automation. Automated tools take the work out of cumbersome tasks like data entry and data management. You can even automate your entire company's website, so you don't have to lift a finger to update product stock.
If you want to improve customer lifetime value (CLV) as you scale, then automated CRM software is a great way to do so. A CRM manages and segments customer data, identifies sales opportunities, saves customer interactions, and monitors personalized marketing campaigns. As you may have guessed, CRM data is instrumental for business scaling.
Once you’re enjoying steady profits, then it really is time to at least think about investing in automation software that will help you scale quickly and effectively.
Pay close attention to these signs and you’ll know exactly when it’s time to invest and scale your business. Who knows, you might even be at that point already.