Once your business is past the startup phase and has found stability in the market, your next pursuit is likely expanding your operations. However, scaling your business—increasing sales while maintaining efficiency and profitability—is not always as easy as it sounds. A few key components must be in place for business scalability to be successful.
Before you take on the challenge of growing your small business to new heights, make sure you have solidified these three important things.
Strategy
The most important thing any small business needs in order to scale is a solid growth strategy. Scaling without a clear plan forward can lead your business astray and can result in less-than-favorable results.
Business owners looking to scale should refer to or create a business plan that outlines the projected growth and profitability of the company. With a clear plan in place, you can be sure that you stay on target as you pursue new ventures and build on your successes thus far.
If you’re just starting your business, consider how you can build scalability into your business plan. What tools, knowledge and structures will enable your small business to handle increased demand down the road? Also consider what markers will tell you when your business is ready for growth.
Structure
Another key aspect of scalability is business structure. Small businesses that lack the proper organization and workflow will have a hard time scaling because it will be difficult to maintain a balance between profit and efficiency. This often means having a team of employees you can trust to delegate tasks to.
Make sure the workflow structure you have in place is efficient for your business at its current size before attempting to increase sales. Your processes should be standardized, so they can be easily replicated by your team. Once you have this structural foundation, it will be much easier to multiply and grow.
Funding
Building a scalable a business is not free. It often takes a significant amount of investment over time to reach a happy medium of profitability and stability. Small business owners will need working capital to ensure all of the pieces are in order to effectively scale the business and navigate any financial hurdles along the way.
A few ways to make the investment leap in your business or franchise is to obtain a loan from the Small Business Administration (SBA). If you choose this route, you’ll want to ensure you have a repayment plan in place to avoid overburdening your business with debt.
Another option is to infuse your business with cash through a rollover as business startup (ROBS). ROBS allows you to put your hard-earned retirement funds to work in your own business without debt or penalties. This might be a great option for small businesses that are ready to take advantage of new opportunities and scale sooner.
Scalability is all about how well your small business can accommodate growth. Having the right plan, workflow and capital sources in place will ensure your company can take on new business without struggling to keep up with demand. At Tenet Financial Group, we help entrepreneurs capitalize their small businesses through funding sources like SBA loans and ROBS. If you’re preparing your business to scale, email us today or call (888) 901-3335, Option 9, to reach a Senior Funding Consultant.