5 Tips On Scaling Your Business
To some, “making it big” means to successful scale their business both domestically and globally but doing it wrongly or prematurely may cause many errors, setbacks and could potentially lead to a disaster instead. For many SME owners, it may be dangerous to “experiment” with the wrong scaling strategies because of tight finances and limited resources available.
In this article, we look at a few tips on scaling your business to minimize losses and ensure a smooth journey in scaling your next business.
1.Looking at the Big Picture
At the beginning, many entrepreneurs may not look at their business as a whole. Not envisioning the future of your business while building your scaling strategies can hinder your growth. For example, Ben Walker, CEO of Transcription Outsourcing, LLC started out in medical transcription, not knowing that legal transcription and law enforcement transcription was also in high demand. Once things started to change in the healthcare industry, they were forced to take a step back and re-evaluate what we could to keep the doors open. That’s when he started to listen more to the people calling us from law enforcement agencies and law firms. They always knew they existed, but not the extent to which the demand did. They realized that they lacked sufficient research in the beginning for the transcription industry as a whole because if they did, they would have been able to pivot sooner.
2. Working with Advisors
Any fast-growing business will soon exceed the point where the founders can grow it alone. When they’ve reached this point, engaging strategic advisors can help you push through this growth hurdle and move to the next step. With the right strategic advice, it will be able to help shortcut your learning curve and become a catalyst for growth.
There are two ways of working with an advisor – formal and informal. Having an advisor can be as informal as an investor or a professional in your industry that is willing to share advice over a cup of coffee. The other option is to formally engage an advisor to discover new business strategies to fast-track your growth. (Source: Forbes)
3. Evaluate Financing Options For Expansion
The three main ways to finance your business for expansion are – to work with investors, crowd-funding and debt-financing.
Working With Investors – You may choose to consider venture capital funding or work with a private or angel investor to finance your expansion depending on the size of your business and the scope of your expansion plans. Investors can be highly beneficial for SMEs as they offer insights and experience about expanding your business. However, working with an investor means dividing equity in your business and there is a slight risk of the investor having different ways of handling things which may conflict with your initial plans.
Crowdfunding: If there is a loyal network of customers who are excited about your plans for expansion, it is useful to consider whether crowdfunding your expansion through a platform like Kickstarter might be helpful for you. As these customers have a sense of ownership in your brand, they may act as brand ambassadors and even help to generate buzz about your expanded business model within their social networks.
Debt-Based Financing: SMEs can also choose to fund their expansion plans through a small business loan – either from a bank or from an alternative lender. If you have a strong credit, you may also consider a traditional term loan, or an SBA loan. If you only need a small amount (under $50,000) of financing, consider an SBA microloan. (Source: Inc)
4. Build A Public Profile
When your business profile is more visible, it improves your credibility with potential customers and investors, leading to business growth in your practice. Since we live in a people-to-people world, the general public want to know more about the leader or founder of a company, how it all started and your partners. If you have a proper “About” tab in your website, it’s easier for people to find out more about you and your story. It’s like meeting a stranger during a network event – if you don’t give an introduction to who you are and you dive right into what you’re selling, will people still be interested in listening to you?
There are many ways to build your public profile – being active on LinkedIn, get quoted in the media, speak at public events to share your success story and getting involved in your community. Take your pick and start building awareness for you and your business today. (Source: Forbes)
5. Take your time to scale
Many businesses looking to scale their small businesses globally tend to want to do so rapidly. However, there is a risk of imitation of your product and services if you expand into certain territories. Some may even come up with a competing product or service of their own. While there is some pragmatism to this approach, it is more often a mistake that can cripple businesses.
For example, Uber’s strategy for expansion was based on a “move first, ask questions later” approach. They managed to set up quickly to be the only player in the market, but encountered legal issues and cultural barriers due to a lack of research. This allowed domestic competitors to move on their position quickly, and very soon outcompeting them. Hence, they were eventually forced to close or sell off several divisions, including their entire operation in Singapore. (Source: Startup Nation)
Taking the next step to scale your business is not that difficult if you grasp the right opportunities and be cautious of who you’re dealing with. It is also crucial to manage your finances well to make sure that your expansion project does not burn too big a hole for your pocket. Not forgetting that you should not be afraid to seek help from advisors, business coaches or with local business owners.