When you’ve been running a small business successfully for some time, the challenges of scaling it up can be intimidating, but standing still is never a sensible option. Your business will be vulnerable as it expands, however, with good planning and organization you can keep the risks to a minimum and get yourself into a much stronger long-term position.
Start with a plan
You might be surprised by how many business owners approach expansion in bits and pieces without any coherent strategy. it’s easy to drift into this but it can get you into serious trouble as some parts of the business struggle to keep up with others. You might find that production is unable to meet the demand generated by your marketing for instance, leaving you with unhappy customers, or you may be stuck with a lot of materials and no finished products because you don’t have enough equipment. A planned program of expansion doesn’t mean that you have to invest in every area at once but it does mean coordinating them, doing thorough research and making sure that you know how to approach each step before taking the first one.
Find the right investors
To make sure you can handle any bumps in the road, you’ll need to have a good supply of money available during your expansion, above and beyond what you need to spend directly on new property, equipment, stock or hires. Some businesses take their time and put money aside before taking the plunge, but that may mean risking stagnation or missing an advantageous moment. Often a better approach is to look around for low-cost loans or investment. Some investors specialize in getting involved with businesses at this stage; like Bill Malloy in the tech sector. It’s easier looking for an investor at this stage than it is when you’re new and have yet to demonstrate what you’re capable of, so take your time and make sure you find the right person. Connecting with someone who understands your sector well and is willing to give advice can be a big help.
Clarify your supply chain
When you’re scaling up your activities, you’ll need to know that the other businesses in your supply chain are ready to cope with that. Can your suppliers get you everything you need on time and in sufficient quantity or will you need to look for new ones? Will you actually be able to get all your products to market? Don’t just accept word of mouth on this — people are often happy to nod along informally because they don’t want to lose custom, only to try and figure out the details once you’ve gone. You can’t afford to be let down at this stage so make sure you get every promise in writing. identify potential risk points and come up with contingency plans well ahead of the time when you might need them.
Find the right people
Perhaps the most important part of your expansion to get right is your selection of new employees. Make sure that you’re in a position to take some time over this. Remember that you don’t have to give them all an immediate start date. Make sure you’ve thought carefully about training and have organized the way they will be working so that somebody familiar with how the business operates will always be available to supply them with advice. Bear in mind that if you’re expanding your base level employees but not immediately increasing your staff at the supervisory level, you may have to make adjustments to working practices to ensure that your supervisors are not overwhelmed.
Talk to your customers
During the process of expansion you’ll need to engage in constant monitoring to make sure that everything is going as it should. One of the most useful ways you can do this is actually to talk to your customers, whether in person, through your website or through social media. Let them know what you plan to do and how you hope it will improve their experience (for instance, because it will result in lower prices or make it easier for them to access your premises). You’ll find that they often have suggestions to make and that they quickly let you know if they encounter problems. Acting on this feedback can help you to resolve any issues quickly, and you’ll also find that they’re willing to cut you some slack if they can see that you’re trying and that you’re listening to them.
Scaling up is never easy to do but getting your business to mid-size will make it significantly more stable over time and increase your flexibility. Future expansions will never be quite as challenging. This is the do or die moment, and if you’re diligent and committed, you can do it well.
