How to Scale in a Healthy Way
What’s the number one indicator of a healthy business? Whether its a startup, an SMB, a consultancy, or a small one-person solopreneuer, the #1 indicator of a healthy business is its ability to scale. Now, you might not pursue growth at all costs, and in fact, business growth shouldn’t be your only concern. However, if you have the ability to control the growth of your business as required, your business will be healthy and sustainable more or less forever.
So what’s the difference between a scalable business and one that is not scalable? It’s the answer to this question: can you handle increased demand while remaining profitable?
Take a second to think about how you would answer for your particular business. If a flood of new business came through your door, how would you handle it? Not sure? It’s best to be prepared for the eventuality.
This blog post will give you some tips on scaling profitably and simply as possible.
What do you need to get started?
Generally, scaling will never be perfect. There will be “growing pains.” Things might break and require your attention to fix. While this may be unavoidable, it can at least be contained. Some businesses won’t be ready to scale until they’ve achieved a certain level. In other words, if you don’t have a good foundation, you shouldn’t be thinking about scaling yet. Here’s the bare minimum:
If customers buy once, but you never hear from them again, that says something about you, your offer, and your product. Similarly, to gain high retention and repeat income, some businesses attempt to implement a subscription model. The same problem applies — if customers aren’t coming back after your first offer, they won’t agree to a subscription. Scaling a broken offer will result in a broken offer, but at scale.
You should be able to predict your revenue from month to month. Which means the foundations for your traffic sources should be in place. You might run paid traffic or do SEO but simply getting trickles here and there from podcasts or other organic sources is not scalable.
Diversified Income Streams
Multiple streams of income provide security for you and your business. But it’s more than that. Having multiple sources of income means you don’t have to push one or the other to its limit to try to scale. If something “breaks” with one portion of your business, the other portions can make up for it. Plus, you can expand across multiple streams, and if one proves to be unscalable, you still have others as backup.
Identify Your Goal and How to Get There
With no goal and no plan, your business will probably not get to where you want it to be in the next few months… or even years. So the first thing to do is to craft a goal and put it up somewhere you and your entire team can see it. Sometimes, the simple act of looking at a goal every day can help kickstart your creative mind into coming up with ways to reach it.
That being said, after you have a clearly defined goal, it’s time to figure out how to get there. Let’s say you want to hit $1m in revenue in the next 12 months. Map out your current processes and make a list of weak points and how much you could be losing from each weak point. Identify the opportunity cost. In some cases, it will actually be cheaper to invest time, money, and energy into fixing a weak point than to let it stay. The investments in technology, staff, supplies, or budget will pay off in the long run.
This being the case, the next step is to fund your scaling efforts.
This process will be different whether you are a bootstrapped entrepreneur or a venture-backed startup. Regardless, scaling costs a lot, usually a significant amount upfront. Whether you search out investors, open up new loans, or run a promotion to your list for funding, be prepared to font the costs. The worst time to find out that you don’t have the money to complete a project is halfway through the project.
As a side note, you might consider outsourcing certain projects. An outsourced project may take as little as half the expected cost while allowing you to finish up multiple projects simultaneously by freeing up the work hours of your in-house team. (More on that in a moment.)
Shift Your Focus
If you’re interested in scaling, you’ve probably already accepted that delegation and automation are going to be absolutely key to your success. Tasks that were done manually before must now be automated if they are to be done at scale. Tasks that were previously your domain must now be given to someone else. It’s just the reality.
It’s almost inevitable that you’ll invest heavily in automation technology and maybe even bring on some new staff. Remember, these one-time investments will pay off greatly over the long term. And, as you scale, you might find yourself taking on different and new responsibilities while your co-workers now own some of your old ones. Just make sure to keep ownership of your top skills.
One of the top ways to delegate and automate is through outsourcing.
A good remote outsourcing partner will provide vetted and managed staff for your projects and work seamlessly with your in-house staff to get more done in half the time. Further, many reputable remote agencies will actually provide access to their high-end industry tools. They will use it for you and apply it to your business, which may save you the expense of investing in your own tools.
Flexible pricing models, expert consultations, and scalable staffing also work in your favor with remote outsourcing. It could be an excellent way to test the validity of a project very cheaply and quickly before you apply the talents of your in-house team to work on it.
Before you scale, make sure the foundations are in place. Multiple income streams and a great offer are just the first steps. You’ll have to identify and even predict weaknesses and invest in technology or additional staff to automate them. Scaling up could be very stressful for a period of months. However, you might consider outsourcing. Not only will good remote teams be able to provide scalable, reliable staff, but also the tools that might otherwise be cost-prohibitive.