A. Shibli
By putting in place sound business practices that can be duplicated at various stages of a company’s growth, entrepreneurs can ensure that their business scales-up to remain successful in the long run.
The terms ‘scaling’ and ‘growing’ are often used interchangeably when talking about business. But the two are fundamentally different.
A company’s growth can encompass an increase in revenue, sales volumes, customers, geographical reach, assets, and workforce.
Scaling, on the other hand, refers to a company’s ability to manage this growth in a consistent, cost-effective manner.
In a scalable business model, the growth is inversely proportional to the cost. This essentially means that when a company scales its business operations, it is able to achieve new and bigger targets while improving the efficiency of its resources.
Most small businesses struggle to scale, despite initially growing fast
According to Business Development Canada’s Scale-up Challenge Report , small businesses, particularly micro-enterprises, represent a growing share of businesses in Canada. However, the vast majority of them tend to remain small businesses, which has an impact on job creation. Each year, barely 2% of mid‑sized businesses will successfully transition into large businesses – meanwhile the others remain mid‑sized (82% of the cases), become small again (13%) or simply cease operations (3%).
The BDC finding of small businesses struggling to scale is not unique to Canada . In fact, according to an article by Equidam, the average growth rate for European startups is over 100% in the first year, over 80% in the second year and over 60% in the third year. This shows that while companies are able to grow, they are not necessarily able to scale.
Whether you’re a relatively new startup trying to build a sustainable growth model or a well-established company looking to scale your operations further, these 10 strategies will guide you towards sustainable and repeatable growth, and help you buck the above trend!
1. Focus on what you want to be (not on what you are)
The growth potential of your business depends upon your own ambition. Aligning your resources and energy to focus on your current targets will allow your company to stay in business. But such a viewpoint can be dangerously myopic if you’re expecting your business to scale consistently and profitably.
Your present decisions should be based on your long-term goal for your business. This vision can be to generate high revenues, acquire a diverse portfolio of customers, and have a wide geographical presence.
It can also be something as simple as pursuing your passion or making enough money to support the lifestyle you aspire for. Whatever your dream—big or small—you need to start taking actionable steps to achieve it from the get-go.
2. Solidify your unique positioning
To thrive in a business environment proliferated by new entrants, trying to outdo your competitors is just not enough. You need to go beyond the existing consumer demands, find your niche, create a need for it, and be the best at delivering on those needs.
One of the ways to distinguish yourself from your competitors is to make the most of small details such as your domain name. Not many businesses will think twice about their web address, so giving it at that additional thought can make all the difference.
For example, you can use new domain extensions such as .TECH, .STORE, .ONLINE, .SITE, .SPACE, etc. to better brand your business and stand out from the competition. Here’s a way to look at this:
Your competitor’s website – www.businessname.com
Your website – www.businessname.store
Guess which one of these is an eCommerce business?
Such a position, also known as the Unique Value Proposition, should be the backbone of every decision you take, every investment you make and every message you send out. Setting yourself apart from others in the industry is what will ultimately guide your competitors’ customers to your business, entice potential investors to invest and inspire your team to put in their best.
[Learn more: 7 Simple Strategies to Find a Great Business Name]
3. Build a great team
You may have all the infrastructure, funds, and other assets in place to take your company to greater heights. But you need the right people on the right job to be able to make the most of what you have on hand.
As you work together with your talented team to scale your business operations, you will learn how to best utilize each member’s strength. You will also feel the need to hire more people to take on the additional workload. Compared to people who have been with you since the inception of the company, new employees may be harder to integrate.
By creating an environment where each member thrives, grows and feels recognized for their efforts, you will ensure that they are motivated and inspired, and treat the company like their own. This can be done by giving them the freedom to take decisions and incentivizing their achievements.
4. Build a strong network
No company ever succeeded in working in a silo. This is because it is almost impossible for a company to be entirely self-sufficient. Create meaningful and mutually beneficial partnerships with parties outside of your business to obtain the best talent and resources. These third parties can be vendors, service providers, customers, investors, and even your competitors.
This will help you maximize your company’s growth and reduce the pressure on your internal assets and team members. It will also improve your goodwill in the industry and project you as a trustworthy business partner, making your company more lucrative as an investment.
[Learn more: Networking without fear: tips for both introverts and extroverts]
5. Let automation do half your work
As your customer base grows, so will the demands on your workforce and also yourself. Computer-based tasks related to maintaining records or data entry are no doubt essential but can be highly mundane. They can drain and demotivate your people and may even turn out to be a waste of their potential.
Overburdening your team and trying to manage everything in a hands-on manner can eventually limit the growth of your company. On the other hand, setting up automated processes and workflows to handle relevant tasks can allow you and your workforce to focus on the bigger picture. It will also help you in keeping track of the operations, minimizing the probability of error and keeping costs low by eliminating the need to hire too many people.
By automating processes such as task management, customer support, onboarding of new employees and social media management (to a certain extent), you and your team can focus on scaling strategies and creative problem-solving.
[Learn more: Tips to consider for business automation – by SmallBusinessBC]
6. Learn from your competitors
Sometimes, the biggest source of inspiration can be the competition itself. Identify the big players in your industry and learn from their success stories.
- How have they improved their offerings?
- Who are their customers and why do they buy from them?
- What channels do they use to reach their target audience?
- What is the strength of their team?
- How has the company grown?
- Is there any brand campaign of theirs that you find particularly innovative and effective?
Understanding your competitors in terms of where they come from, where they are, and how they reached there will guide you in scripting your own success. Such learnings can provide the right framework for your own decisions and policies, help you better manage your resources and set realistically achievable goals.
7. Identify the barriers to growth
Scaling a business requires ambition and hard work, but also pragmatism. When demand increases or the business environment goes through changes, it may create gaps in your production and delivery process.
You may need to reassess your goals and bring about changes in your strategy. In doing so, you may realize that your current resources are inadequate or counterproductive to the success you aspire for.
Equip yourself to deal with such challenges by a thorough and realistic examination of every step in your growth strategy. Factor in all possible contingencies in your roadmap to success and come up with actionable ways to overcome them.
Most importantly, do not shy away from taking tough but crucial decisions. These may involve making changes in leadership, extra spend on technology or training and engaging the expertise of external parties. Taking cognizance of what the future might bring, whether in terms of success or obstacle, will prevent you and your team from being overwhelmed.
8. Encourage your customers to market your business
The ease with which businesses can now reach their customers through social media makes paid marketing an enticing prospect. This has created a flurry of advertisements on every popular channel, which is often inimical to the very purpose of advertising. It makes consumers dismissive of such marketing messages and wary of the products or services being marketed.
Traditional and non-traditional channels notwithstanding, people still rely on word of mouth and personal recommendations to make their purchase decisions. Even on eCommerce websites, customers often check the user reviews of a particular product before buying it.
According to a survey conducted by BrightLocal in December 2018, consumers read an average of 10 online reviews before deciding whether they trust a business/product or not.
It would be remiss of any business to not capitalize on the power that a happy customer wields over the success or failure of your marketing initiatives. By delivering consistently good services to the people, providing satisfactory customer support or after-sales services, engaging with customers through compelling content and social media posts and incentivizing referrals through discounts and special offers, you can make the customers your biggest marketing tool. This will allow you to attract others who match your buyer persona and also help you save on advertising costs.
9. Do not compromise on quality and consistency
In order to give your customers compelling reasons to keep coming back to you (and guide others to you), you need to maintain the quality of your offerings. It is something you owe them in return for their loyalty.
When companies, especially start-ups, go through growth spurts, they often tend to lose sight of what brought it about in the first place. As a result, the quality of their product or service deteriorates. Even a small lapse is enough to make your customers take their business elsewhere. Such instances can greatly tarnish your market reputation and decelerate growth.
No matter what opportunities or challenges your business is confronted with, you should never lose sight of the values that helped you earn credibility in the first place. By adhering to the practices that define your company culture, you will also ensure that your team stays inspired and committed to business goals and ideals.
10. Identify your future milestones
Even seasoned businessmen with highly developed foresight can never completely predict what the future has in store. Risk and uncertainty are inevitable in the growth of a business. But by careful planning, seamless execution, and regular monitoring, you can ensure that you keep your scaling efforts on track.
A lot of trial and error goes into growing a business. But the journey can be a lot smoother if you and your team are working collectively towards clear, realistic and tangible milestones. At the same time, these goals need to be challenging enough to urge everyone to push themselves and realize their true potential.
Identifying future milestones will not only help you align your resources efficiently but also plan for difficult situations and take corrective steps in a timely manner.
Conclusion
While there is no tried-and-tested scaling model that suits all businesses, identifying a few repeatable practices, such as the 10 mentioned above, and replicating them at various stages of growth can help you scale your business in a sustainable manner.
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This article was written for Webnames Blog by Alisha Shibli, a Content Marketing Specialist at Radix, the registry operator behind great new domain extensions like .store, .online, .tech, .press and others. You can follow Alisha on twitter @alishashibli.