Scaling up your business – Part 1

I bet you every business owner you talk to is interested in growing their business. They’ll talk about business growth or scaling up their business. A business that isn’t growing is declining. But scaling up isn’t as easy in practice. When you’re a one-person business you have to do the selling and the doing plus all the admin in the evening. When you’ve got a team of people you have to think about recruitment, processes, systems and new business. So, what are the things to think about if you want to successfully scale up your business?

4 steps to scaling up your business

Let’s break this down into 4 practical themes:

  • Having a product that’s easy to scale up with. If you are the only person delivering the product then it’s really hard to scale up beyond your waking hours!
  • Having a scalable business infrastructure. That includes the systems, processes and organisation that are a platform for growth rather than a hindrance.
  • Having an effective marketing function that generates inquiries and leads at a level the allows for growth.
  • Finally, having a mindset and leadership capability in the business that can handle growth and forward planning.

In this blog I’ll describe the first two steps. In a follow up blog, I’ll cover the final two steps and set out how you should start your scaling up journey.

A scalable product

Imagine your business creates bespoke photography for company boardrooms. And you are the only person in the business who can do that. Once your week is full of work then the business is at its limit. And you probably are tired and stressed! Your business is not scalable. You can probably charge top notch prices for your photography and customers love them. But each customer is unlikely to want new photos every month or year. You need a constant source of new customers.

Take another photographic scenario – doing those annual school pictures. You know the ones. Where there is an individual picture of your child plus another group picture of the whole school or the year group. Not so artistic as the first scenario. Yet it is fairly prescriptive. Those individual and group pictures are pretty standard to set up. Also, as a parent you’ll know that you can’t avoid buying pictures to share across the family, give to grandparents and put up on the wall. Finally  you know these pictures will turn up in your child’s school bag at least once a year for every school year -you can set your calendar by it.

You might have picked up the characteristics of a scalable product?

  • You can teach other employees to do it, standardise the process and roll it out;
  • The product needs to be valuable to customers;
  • The product needs to be something that customers come back and buy repeatedly.

You could take each of your products and rate each one , say out of 5 on how teachable, valuable and repeatable they are.  The top scoring products are candidates to plan for scaling your business.

One consequence of scaling up with the best product(s) is that it should create a wholesale shift in your business from selling lots of things to a few people to selling only a few things to lots of customers. As a by-product you are less reliant on a single or small group of customers.

One summary message I share with other business owners is to grow where you are planted. That means sticking to businesses and markets you know best. This approach shortens learning curves and makes best use of those years of experience and knowledge.

A scalable infrastructure

As organisations grow they find they need to segment into different parts, more often to specialise in different functions within the organisation. Here’s where complexity can be the blocker to scaling up. As segmentation and specialisation increases there is more risk of those segments being too distant from each other – physically but more importantly in terms of shared thinking and communication. In parallel, information can be messed up – you know: duplicate records, stand-alone information sources, different reporting, etc.

This growing risk of complexity will drive how you structure your organisation and establish accountabilities. This is where a scalable infrastructure becomes critical. Here’s a few practical examples:

In a 2-10 employee business you may need a better phone system to transfer calls around the team or to think about office layout to encourage teamwork;

When you are approaching 50 employees then you’ll be thinking about your systems for accounting, stock control, sales, work scheduling, etc – looking for a joined up approach and systems that can grow with increased sales, customers, staff, etc.

When you are heading into 100’s of employee then the systems challenge and integration is even more important. Equally the culture and management structures become critical to encouraging growth.

In part 2 I’ll describe the next two scaling up themes, having an effective marketing function and developing a scalable mindset and leadership capability. In the meantime, take a look at my recent post on LinkedIn for more about scaling your business, you can read it here.

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