07 Dec Scale My Empire: 5 Tips To Scale Your Business Successfully
How do you keep up with business growth and effectively scale your company? Scale My Empire has the tips your business needs to stay competitive and productive in the face of rapid growth.
Your business has been grinding away for more than five years.
With revenue skyrocketing, your team has doubled and you couldn’t be happier about the growth you’re experiencing.
Long-held dreams of running a successful business are finally coming true.
But you’re just now realising that your business requires special maintenance and care to stay healthy as it grows.
Growing your business means you’ll face challenges such as:
- Improving productivity
- Staying competitive in your market
- Managing cash flow
How can you overcome such challenges?
It starts with understanding that your business needs more than growth to be successful.
Your company needs to be sustainable.
This is what scaling your empire is all about. You don’t just sit back and watch your business accumulate more sales. You actively make changes so your company can keep up with itself.
We’ll discuss five areas that you need to pay attention to as your business takes off. With these points in mind, you’ll help your company not just survive, but thrive.
Let’s begin.Learn the five tips to scale your business successfully. #ScaleMyEmpire #smallbusiness Click To Tweet
1. Increasing Your Margin
What Is Margin?
Margin is the difference between the revenue your business brings in and how much it has to spend in order to make the sale. A successful business is marked by spending very little in comparison with the revenue it generates.
Sales growth does not equal an increasing margin.
We can illustrate this quite simply with the example of baking cakes to sell.
If sales were increasing, you’d have more revenue . . . but you’d have to pour that right back into buying ingredients to make more cakes.
Adding resources to keep up with demand shrinks that margin.
Why Margin Matters
Growing popularity and growing sales are not the same thing as scaling a business.
To properly scale your business, you need to see that margin increasing. Otherwise, you’ll keep right on doing the same thing you’ve been doing and burn yourself out with the increased workload. Simply seeing revenue growth isn’t enough. If you have nothing to show for it, your company will end up stagnant and you won’t have extra funds to spend on growing your brand
How to Do It
Look for ways to increase production while minimising expenditures and you’ll see that margin start to grow.
Think efficiency and automation. Systemisation and technology can play a huge part here.
Are there any aspects of your production or service which can be expedited at minimal cost?
Take online travel booking websites, for example.
Sure, anyone can plan a trip. Travel agents have been around far longer than the Internet. But by taking to the web, a few companies like Expedia.com have found a way to service millions at minimal expense.
They made a killing by saving time.
To run a prosperous business, you want to be earning more than it takes to keep your business alive. The extra is what will let you thrive.
Giving attention to your company’s margin will help you stay independent from the pressures of cost structure. You will have more financial freedom to set prices and make changes to your brand.
In short, a large margin will give you an advantage in staying strong and standing out from the competition.
Focus on more than just sales and hiring to grow your business. Seek out new ways to save while you earn, watch how your margin increases and bask in the success of a thriving business.
Find out more: The Six Steps to Scaling a Business
2. Preserving Company Culture
During your business’s startup phase, there was a coziness, a familiarity. A few friends came together with a common goal and a dedication to success.
Everyone was aware of and valued one another’s strengths, supported each other, embraced change, and all were just generally tuned-in to the same channel.
That dynamic mixture generated energy that breathed life into the new business.
Now that your business is taking off, you’re surprised to realise that the fire has cooled down significantly.
A neglect of company culture may be to blame.
What Is Your Culture?
Company culture persists, even when the business owner doesn’t try to cultivate one. It’s the general atmosphere and mood of the environment measured in the attitude and work ethic of the team members.
Why You Must Preserve Company Culture
So what does culture have to do with the growth of your business, you ask?
As a business grows, so does the number of managers, employees and so on. The more people there are, the greater the variance in thought and emotion and the greater the potential for clashes.
You have to admit, too, that it’s tough to get to know coworkers individually once there are too many to interact with on a regular basis.
Employees can start feeling lost and isolated as the company grows in size. This leads to a disconnect with the company’s mission. A culture in which people focus on their own little world, show up for work and go home without ever giving 100%.
Some may start to feel the stress of meeting increasing demand.
Gradually, there arises a need for counseling, mediation and other resources that distract from business growth.
That’s not to say your employees don’t merit such support. They do.
In fact, they matter so much to your company that you should take a more proactive approach when it comes to your company’s culture.
Whether or not your employee base is happy really matters.
If your employees are dedicated to their work because they love it, then they’re going to work hard to satisfy customer and clients.
Clearly, that’s a great contributor to revenue growth.
How to Do It
Ideally, you want to choose your culture before building your business team rather than letting one manifest itself. Determine which kind of working atmosphere best demonstrates your company’s values and then hire individuals who fit.
This starts at the very beginning of the hiring process.
Hire new employees selectively based upon how they fit in with the team rather than their qualifications, alone.
Zappo CEO Tom Tseih has an effective (though some may feel extreme) approach to weeding out the noncommittal employees. New hires are actually bribed to leave the company after a few weeks. If they indicate they’d rather stay on the team than leave, they’ve passed the test.
You don’t need to go to quite that length, but there are other great ways to promote and maintain a positive company culture as your business grows:
- It all starts with hiring – hire to your vision, mission and value, not just skills and experience
- Celebrate individuals and keep traditions alive
- Be approachable to everyone on your team no matter how large it is.
- Walk the floor. Spend some time on the ground to understand the workers’ environment and feelings towards their job
- Host company parties or picnics in informal settings
- Encourage ongoing staff development
- Bring in an experienced outsourced HR partner to develop and manage people and HR processes
Stay committed to upholding your business’s values and mission at all times. That will have positive effect on your team as your company expands.
3. Enhancing Financial Visibility
What Does Visibility Mean?
The kind of visibility we’re going to discuss here is the financial sort.
This is your ability to foresee your business’s future financial situation.
A thorough understanding of your company’s current circumstances will empower you to confidently make major decisions down the road.
Financial visibility is about more than just a budget. Your business’s cash flow is a system you can compare to the engine in a car.
It’s running, so that’s a good start. Financial growth is when the vehicle gets moving.
Where to? Profit and a sizeable margin, naturally.
But you can’t just let that vehicle drift aimlessly towards the goal.
Have a good look at the road and create a navigational route. That’s what a financial plan does.
As Kathy Gregory at LivePlan puts it: “A solid financial forecast precisely reflects the business plan and the metrics that capture the financial goals of the business.”
Thus, your navigational plan to your company’s destination of financial success takes into consideration specific goals and realistic expectations based upon what your business is capable of.Financial growth is when the vehicle gets moving. Learn more #Finances #Margin #Profit Click To Tweet
Why You Need Visibility
You can’t make changes to your business as it grows without visibility any more than you can drive a car with your eyes closed.
If you know where you stand financially, you’ll be able to hire just the right number of people to accommodate your growing business. You will also be more likely to win the support of investors and capital since others like to hear a solid plan for company growth.
The ability to predict where your business is headed is the key to making choices that can help bump up that margin we discussed earlier.
So even if you wind up delegating the accounting and bookkeeping to another, you still need to understand the data since it’s the basis for predicting your company’s financial future.
How to Do It
To accurately forecast your financial position, you need four things:
- Sales pipeline and performance
- Job profitability and margin
- Profit and loss statement
- Cash flow forecast
Track the figures on these papers for a minimum of six months to get a baseline of how your business is doing so far.
Combine your existing financial data with the current and expected economic trends to figure out whether you can expect to see an increase in revenue over the next month.
Visibility is neither a blind guess nor a spot-on prediction. It’s somewhere in between.
Once you have an idea of where your business is headed, make a summary note. Keep it simple and modest and don’t focus on the details since there will be too many of them to factor in.
Be flexible. Change your forecast every month as the previous month’s data rolls in.
But a lack of financial forecasting is very common for small and medium business owners. How do you get started if your financial data is a complete mess?
You don’t need to waste your time running around chasing paperwork and getting a headache over conflicting reports and inconsistent reporting systems.
Successful planning with financial visibility will help you scale up as your business grows.
4. Boosting Productivity
What Are the Challenges to Productivity?
It’s not usually a lack of resources, but rather an abundance of them which leads to productivity issues.
As your business grows, so do the overhead costs. You may find yourself having to pay for more middle managers, a larger admin team, payroll tax and a larger office.
To maintain your competitiveness in the market, you need to find ways to boost productivity.
Multiple needless systems can confuse employees necessitating time-consuming meetings to clarify matters.
Too much administrative work and red tape can slow down the works, as well.
These issues commonly result from company growth without organisation.
Then we have the usuals:
- Job dissatisfaction
- Inadequate tools or technology
- Lack of communication
It’s worth taking the time to ask around your company to see what others think.
Is the increase in demand putting an unreasonable workload on your employees (and perhaps even you)?
Could any improvements be made to existing systems and methods?
Can you use technology to automate costly mundane tasks, redirecting resources and manpower into directly billable work?
Would a new break arrangement help everyone to cheer up?
Why Being Productive Is Important
No one wants their company’s workflow to slow down, naturally. But it’s so easy for things to slack off during the crucial transition period of business growth.
Your company may be facing some exciting new changes as you expand.
Be careful that you don’t allow these changes to distract you from checking on productivity.
It will take time for your team to adapt to new situations so be patient as you keep an eye on the production figures.
How to Do It
You want consistent results across the board, so it may be hard to delegate tasks to another. But in light of the increased workload, doing so will be in your best interests.
Consistent, systematic methods implemented throughout your company will make it easier to delegate. We’ll discuss this a little further in the next section.
For now, here are some other ways to boost productivity:
- Let your employees know you respect their limits
- Allow a more flexible arrangement for breaks
- Take advantage of technology to automate processes
- Set up seminars, training sessions and manuals so everyone can learn at once the right method for getting a job done
There’s more inspiration for boosting individual productivity to be found in the varied and personalised work habits of the Envato Tuts+ Team. Check it out when you get the chance.
Remember that demanding extra time to meet demand isn’t always the answer. You may get that extra time, but it comes at the sacrifice of work quality.
“By valuing time over output, businesses unwittingly punish their most productive employees and reward the slackers.” – Jason Lengstorf
5. Establishing Effective Systems & Processes
What Are Your Current Systems & Processes?
We’ve already established the fact that too much standardisation will slow down workflow and cause confusion.
But you still need consistent systems in order to be productive.
This is particularly true in the midst of company growth.
You may have a great team, an amazing product and tonnes of resources. Yet, if you don’t have systems that support growth, all of that will fall apart.
Why You Need to Change Your Processes
As your production goals, employee count, processing facilities, shipping methods and even geographic locations increase, you’ll need newly-designed systems to accommodate the change.
Your processes should scale up just as your business does.
How to Do It
Take notes on a new procedure from day one. Put down even details you may assume are obvious. Stay open to suggestions.
Get input on problems, real and potential, from those at all levels. That way, you can create a standardised procedure that’s realistic for everyone.
Don’t try to take on everything by yourself. Your team may know how your business operates even better than you do. Guide your workers on how to create the customer experience you want, but then leave the process design up to them.
Next, create a manual. It can be a hard copy or an online version. Just make sure all can access it easily to see updates. Delegate out this task or hire out the work of creating the process manual if it’s too much to handle.
As your company grows, don’t be rigid in your thinking. It’s easy to get comfortable with your original systems, but they may not be the healthiest for your business as it expands.
Get rid of things that won’t scale in proportion with everything else. For example, a process that worked well for one small shop may not apply to multiple new geographic locations.
Remember, a successful company isn’t marked by a growth in sales, alone. A truly successful business adapts its model to meet the demand in the most efficient way.
With some professional help, you can meet the challenges of a growing business.Remember, a successful company isn’t marked by a growth in sales, alone. Click To Tweet
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