You had that light bulb moment of a brilliant business idea and it’s been non-stop ever since: you’ve experienced incredible growth and seemingly unheard of success within the start up realm. Yet this is your very problem. You’ve expanded so rapidly, and proved to be such a hit, that you’ve found yourself struggling to scale upwards. You may have too many orders to handle and be in so much demand that supply is being outstripped.
It would seem, for many, the stuff of business dreams, but coping with start up expansion can be a rocky road full of potential missteps and expensive mistakes. So here we take a look at some of the headaches that commonly go along with growing a quickly flourishing, yet still fledgling, business.
Focusing your time and effort: Supercharging start up expansion
1. Moving from working in your business, to working on your business
Key to growth is being able to step back from the tasks that got you where you are today, to working upon the tasks that will achieve the tangible goals of tomorrow.
This means a move from producing your product, fulfilling your orders or delivering your service, to outsourcing or hiring others to do this for you.
It’s vital, however, that this be done incrementally, as such a move can demand significant outgoings. So begin with a list of all of the tasks it takes to run your business, and put together a focussed strategy for breaking these down and outsourcing them. Then get onto the activities it takes to grow by putting together a marketing plan that will ensure the healthy pipeline of sales for you to pass down to your newly established and always developing chain.
2. The topic of financing
Financing can be a notoriously sticky issue for businesses seeking to expand. Core questions that you may be asking are likely whether you borrow to expand, and if so how much? In short the answer to the former would be an unequivocal yes if:
- You know that there is market demand for your product or service that can be fulfilled if you increase output;
- You have a concrete financial plan as to what you need to increase output in a profitable way.
It’s as simple as that. These two elements along with a considered repayment schedule (as well as a contingency plan should the market slow or problems emerge within the support chain below you) are all that you need to be sure that a cash injection is right for your company.
Stock requirements: Re-negotiating your terms
An important point to note for product based businesses is that you may not necessarily have to apply for finance, or at least it may not serve as your only option. As an alternative, you could consider re- negotiating with your suppliers, asking them about extended invoice payment terms or better discounts for larger orders. This is pretty simple business sense in action, although many scaling start ups neglect to consider this and instead pump for a straight cash injection to afford that bulk purchase.
3. Building up an incredible network around you
A mentor, business coach or consultancy service
Business consultancy services, from the right providers, can be worth their weight in gold. These people can be literal commercial hand holders, helping you through the trials and tribulations of expansion and being the defining difference between a strategy that scales your business seamlessly, and the making of the wrong moves and spending a shed load in the process. So you should at least consider such a service – taking a look around at what companies or freelance mentors provide this, at what cost and whether they have experience within your specific industry. Given their business acumen such experts should be able to clearly define what they could achieve for you and provide fairly solid ideas as to the ROI that they could deliver.
Fellow industry professionals and expanding start ups
Online business forums and groups can be a great form of support for you on a personal level. They can act as vital sounding boards as well as places where you can gain insight and inspiration into how others work as well as how they scale their businesses. They can also be online places where you can safely vent about your concerns, frustrations or simply the bad days.
4. Maximising your now highly systemised business through marketing
With a solid system in place for managing workload and producing your product or service through a chain of people, you should craft a carefully planned marketing strategy.
What’s more for businesses with already successful marketing plans that have brought them this far, the need for re-imagining and re-working that plan to support a business of scale is paramount. In the most basic sense, this will require a bigger budget than previously, but beyond this it may also mean you tackling different marketing mediums to reach larger audiences on mass.
5. A few key points for service based businesses
Scaling a service based business, such as social media training, consultancy or financial services, is usually far harder than with a product based business. It can command a unique approach when it comes to this realm, namely ‘Productising’ your service.
Selling that moves from once per client, to multiple times to many clients
‘Productising’ your service means to move away from delivering a service once per client, to selling the service multiple times at once. This is only suitable for certain forms of service based businesses, and is perhaps most often seen within the coaching world. For example, a social media marketing expert who provides one-on-one coaching to clients can seamlessly scale up by providing subscriptions to exclusive video content, or by delivering workshop and/or group based training.
Re-think your pricing
As a service provider you may well have priced as per your time, or on a job by job basis. To achieve scale you must move to fixed pricing, putting together pre-defined packages if you can, and publishing your prices for the world to see to escape both quote requests and scope creep. Most importantly, however, your now productised service must have clearly set boundaries of exactly what the consumer is to receive for the price.