How to Scale a Business in 6 Steps (for mere mortals)

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oogle “How to Scale a Business”, and you’ll get a little under a billion search results. The most prominent search results (the first three pages at least) are written for budding entrepreneurs, taking learnings from global start-up mega-success stories that have taken their laptop-in-a-garage start-up to a $1bn enterprise in under five years. Great. Unrealistic to most, but great.

For these businesses, astronomical sales revenue has allowed them to payout venture capital and attract the best talent in the world to accelerate their growth. For the rest of us that live back on planet Earth, this isn’t really a reality. Garnering information on what I like to call bootstrap scaling can be even trickier because instead of retelling well-worn mega-success stories, its often largely unqualified opinions being pedalled by charlatans that happened to luck out to success, and so again is largely not applicable to the ordinary human being.

So, how do you bootstrap scale your business? First, let’s define scaling: this is the conscious decision to increase the cost base of your business in order to enhance your revenue generating capacity. From this definition we can see a few key implications: scaling isn’t about doing things differently, it’s about doing the same thing, bigger, more efficiency and more effectively. This leads us to rule number 1…

Rule 1. Have a sound business

I know this seems like common sense, but many start-ups fail because they think that scaling is what they need in order to make sales. As a rule, if you’re not making sales when you’re small, you’re not going to make sales after you scale. As such, before you scale, make sure you have the fundamental recipe down-pat; a great product, an excellent customer experience and a stable revenue stream.

Rule 2. Stay within your means

There are literally hundreds of ways to scale, and you don’t have to do them all, let alone do them all at once. Everyone wants to move into the ritzy new office or facility, but if it’s going to place your business under financial strain and cause an opportunity cost on other scaling opportunities you can’t afford, it’s ultimately counterproductive. Start out with low-cost opportunities that give you your own time back, such as bringing on a student for a few hours a week to help out. This is a real win-win situation because they get experience and little extra money, and you’re freed up to do core activity.

Rule 3. Look for non-core processes

Look for those non-core processes and support functions that take you away from your business. Many small business owners toil away for hours and hours every month-end to get their books in order because they don’t want to incur the cost of a bookkeeper or accountant. The reality is that most business owners are probably far less efficient than someone that’s professionally trained, and so they may spend three, four or even five times the amount of time doing their books every month. This time has an opportunity cost attached to it where you’re not working on your business. This brings us to rule 4…

Rule 4. Work on your business, not in it

For many start-ups and small businesses, the temptation to being out there working with your sleeves rolled up on the front-line delivering products or services to your customers is too much to resist. In the early days, the reality is that this has to be the case, but you can’t scale your business and deliver within it, at the same time. I’m hesitant to use the old cliché ‘surround yourself with good people’, but having people working in your business that you know and trust to deliver, frees you up to focus on scaling without being paranoid that there’s someone out there ruining all your hard work. Good people can be difficult to find and even harder to pay, which brings us to rule 5…

Rule 5. Increase your personal profile

Getting out and about in your local market, at events and other forums where like-minded people congregate, allows you to increase your brand presence and exposes you to good people. Combined with a great business brand, you can create a network of individuals that you can rely upon to help with various aspects of your business. If you’re unable to pay, offering sweat equity can be an effective way of getting the horsepower now without the high price-tag. If you do want to pursue this route, make sure that there is a strong alignment of culture and values between you and your sweat-equity partners.

Rule 6. Invest Smart

By definition, you can’t scale without increasing your cost base, so you do need to be prepared to invest. This doesn’t necessarily mean you have to go out and get a business loan for a new office or some capital equipment. Be smart about how and where you invest based on where it’s going to have the greatest impact on your business. Employing someone young and tech-savvy to manage your social media for a few hours a week in the beginning can have a huge impact on the market presence of your business. Understanding and consolidating your brand, having sound business and marketing strategies and developing some streamlined processes that make you ready for a larger business, are all really valuable ways of enhancing your business.

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