The Morphing Challenge Of Scaling Your Business
Much like a fruit, your business will grow when you water your seeds. The seeds are your ideas and your processes. The sunlight is the experience your gain out in the real world of business and trade and depending on your scaling success your fruit will grow. Whether or not it will be ripe is another factor. But the key to understand is that your business will have to naturally scale up and up until you can find a comfortable zone.
Small businesses are at the short end of the stick sometimes because they don’t have the experience to know when growth is purely seasonal and when it’s situational.
You may have a great year but that doesn’t mean you should hire more employees. It sounds strange doesn’t it?
When you’re receiving so much business you need those extra employees. But more often than not, a seasonal bull market will run away and you have to then scale down again. It’s a morphing challenge that’s difficult to understand.
Focus on who you are
The first thing to remember when you’re going through successful and bad times is to know who you are.
Don’t funnel more money into one area just because it’s doing well this year.
Even if you are blown away by your success, always remember what your initial plan was. It should take a lot to move the needle with regards to your long term planning.
The same should go for when you’re going through a time where you’re not making as many sales, where investors are pulling out and when you are being beaten out by your competitors.
This is why you never jump the gun regarding funding. Keeping strict budgetary constraints and fiscal discipline is the best way forward for continuous scaling of your business.
Be prepared for growth
As mentioned, you need to have a good strong fiscal policy so that when the time is right, you’re ready for growth.
Far too often small businesses believe they need to grow and expand to keep up with consumer demand.
However, you need to purely focus on the practical side instead of the structural side of your business.
Increase production in the manufacturing facility, edit a contract for more flexibility with your chain suppliers, and look at more competitive pricing methods.
Don’t hire more employees until you have stayed consistently at a level of income generation whereby you can take on more employees and comfortably pay them salaries etc. Improve your infrastructure before you scale up, such as IT systems, your work premises, larger warehouses, more computers, more servers, business services such as payments, larger HR department etc.
Scalability is quite difficult to understand in business.
What are the correct signs, what kind of planning should you do?
Look at ERP Cloud Computing solutions that allow you to accurately track your inventory, your financial resources, expenses and expenditures. When you have statistics and figures, you can make an informed decision when to upscale your business.
Scaling a business is fraught with mixed messages. You don’t know which signs are true and which signs tell you to hold on or even downsize. Use accurate data and adaptable planning software to help you make the right decision.
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