Scalability is the ability of a system to expand: 5 tips to understand when it is time to scale your business to increase your business, without risking failure.
When it comes to business growth, to have a business model “scalable” is the key to be able to increase its business even exponentially, expanding the business.
Often, however, it starts a company based on a business plan compared to the resources and opportunities of the moment. You just go with feet of lead, while maintaining a prudent attitude, just to avoid doing more than you can chew, but if your business is well underway, your customers are satisfied, your accounts are in order, maybe it’s time to bring the big question: “What is time to make a quantum leap?”
To avoid any misunderstanding, I repeat: this is a major decision, which must be assessed carefully. The variables at stake are many, but there are some signs that speak for themselves. If you recognize someone, it means that most likely it is time to scale level and start thinking to integrate, improve, and expand your business.
Here are 5 factors that can convince you to take the plunge …
- 1 # 01 – When you’re forced to refuse new clients or projects
- 2 # 02 – When you have achieved the goals set
- 3 # 03 – When you are the right continuity of positive cash flow and Workflow
- 4 # 04 – When you know you have a salable product and an appropriate structure
- 5 # 05 – When the risk factor is contained
# 01 – When you’re forced to refuse new clients or projects
Could count on a base of stable and loyal customers is the main objective of any company. It is essential that they are all fully satisfied, they feel followed one by one, and that your company is always able to respond to their needs.
Increase your customer base means increase and improve your ability to manage them. An example? If the demand from customers exceeds your chance to bid you have to choose whether to give up orders because you are not able to meet them and resign yourself to losing customers (and prospects) or decide to increase the availability of goods or services ordered in so you can please everyone.
This means, as appropriate: enlarge the warehouse, increase production, hire staff, and buy more products. In practice: invest to grow.
# 02 – When you have achieved the goals set
When you embark on an activity from scratch lack the necessary tools to predict in detail how things go, for the simple fact that there is a historic company on which to base keen. However, you can draw on a range of statistics, market studies and evaluations that relate to your business sector to calibrate your goals.
Your skills, some right choices, and why not, even a little ‘luck, could have brought you to achieve your goals sooner than expected. If it were, meanwhile, give yourself a pat on the shoulder, and then define your next goals. You’ll have to bring the ambitious but concrete and achievable, and expand your activities accordingly, one step after another.
# 03 – When you are the right continuity of positive cash flow and Workflow
The simple fact of being in surplus is not enough to justify the decision to enlarge your business. You must be able to collect all the data necessary to the business forecasts as reliable as possible, on a monthly, quarterly, annual, five-year and so on, in order to provide a broad and accurate picture of your business and its potential.
Remember that flexibility and adaptability (= react properly in the face of crisis or unforeseen) are the qualities that really make the difference. The golden rule is “to work thinking about the best thinking and planning for the worst.”
If the results of analyzes and forecasts are encouraging, it means that you can count on a good customer base and on a continuous workflow. Things are going in the right direction; take the opportunity to increase your business.
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# 04 – When you know you have a salable product and an appropriate structure
Are you sure that the product / service you offer is salable? You have sufficiently tested and verified? And if the answer to these questions is yes, your business is quite structured to offer it on the market?
Expose yourself with a product not fully developed and / or without the appropriate means to promote it, and market it could turn a business opportunity into a failure. You must be able to count on the right professionals, hire new staff in a targeted way, to have a base of employees and / or serious employees, reliable and in line with the values and objectives of your business.
Motivation and team spirit are essential, and if your team does not just “work”, but it is committed to proactively proposing initiatives, ideas and get involved, it means that your corporate structure is sound, solid and ready to new impetus.
Make sure your new business idea is viable, functions, meets customer expectations. Before exposing large-scale launch, do the small test, PROPOSE maybe to a small circle of loyal customers with whom you have a relationship of trust, collect their feedback.
If you have the security of having in hand a product that functions to 100% and can count on a solid and efficient corporate structure, the time has come to scale!
# 05 – When the risk factor is contained
Richard Branson (founder of Virgin Group), which is certainly not a rookie, he dispensed many tips on how to start a business and develop a business growth. The basic concepts are the passion and enthusiasm, imbue its business starting with something you like and are interested in, and then the usual tips / type “slogan began in small, dream big, plan looking beyond the horizon,” and so saying. At any shop of motivational posters, you will find similar pearls of wisdom. Thank you, Richard.
But the good Branson some stake enthusiasm / suicide puts him well. For example, when you are strongly advised to scale the business only when you are really ready to do it, and not just because there is a possible opportunity that knocks on your door. Which means NOT hire you unnecessary risks.
The quarterly budget surplus, the signing of a new contract, the company dinner where you felt all one big family with the feeling and the company spirit in a thousand things are all fine, but be careful not to get caught her hand.
Before thinking concretely to the expansion, carefully consider all potential risks. Of course, in the world of business risk it is an unavoidable and unpredictable component. But if you cannot predict all of the risks, to be able at least to minimize them it is the first thing to do before considering to scale your business.
These signals are intended as stimuli, like something in your head that legitimately can take the idea to expand your business. If you have recognized more than one, it may be a good time to analyze your options and to plan, organize and lead your business to the next level.