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Scaling up a business is difficult, period. I’ve been through a few rounds and written a book about it, Inevitable Revolutions, hoping to share my experiences with others. Before you start full scale mode for your business, be aware of your finances as you were during your early startup phase.
Business scaling is an important part of success and longevity. Businesses are an investment, so it’s vital to make wise business decisions to scale your technology business. The startup costs of technology can be significant. Scaling your business also costs your business money, so it’s paramount that you’re ready to take on the investment. But with the right tools, ideas and strategies, you’ll see returns as scaling up will be met with fewer setbacks and unexpected speed bumps.
So if your business is ready to scale and you have a budget to stick to, you’re probably wondering how to make it happen, right? Read on to discover five dos and don’ts for scaling your business on a budget:
Related: 5 Pitfalls to Avoid When Growing or Scaling a Business
1. Do create structure
Before scaling your business, it is important to create management/employee structures. Strive to keep teams small so that managers are not overloaded and employees feel heard and valued. Getting multiple managers to report to you may seem inconvenient, but it will help everyone do their job more efficiently. It also teaches your employees how to communicate better and solve problems quickly.
You also need to learn how to be the best leader for your startup to scale effectively. Practice actively listening to your employees, experimenting and being transparent.
2. Pump the brakes anyway
If now doesn’t seem like the right time to scale your business, pump in the breaks. Pumping the breaks doesn’t mean scaling your business won’t come to fruition. It just means that you may need more time to get important parts like marketing and customer relationships in order first.
3. Grow Pride
Give your team something to get excited about as the company achieves milestones and department goals. Get everyone on board with a purpose and cultivate a sense of pride in your company. When your employees feel a sense of loyalty and security, they are more likely to come up with creative and innovative solutions.
4. Manage your finances
Before scaling your business, assess your current financial status. Look at your expenses, profits and your bottom line. Scaling your business somehow costs money, so you need to make sure you invest wisely. You also want to make sure that your costs of scale are manageable. Start by collecting a list of all the potential costs of scaling to get an idea of how much capital or budget you will need.
Then consider whether you need extra capital or whether you have enough left over in your profit margin. Also determine your risk tolerance level. If the budget seems tight, don’t hesitate to go back to the drawing board or wait until your finances are healthier.
Related: 15 Ways to Scale Your Business and Make More Money
5. Achieve your goals first
One of the main signs it’s time to scale is when you reach your first business goals. For example, you have reached a certain profit margin, made a certain number of sales or hired a certain number of employees.
Once these goals are met, consider scaling your business. Scaling your business before these goals are met can lead to a lot of confusion about the next step.
6. Don’t Live in the Past
Innovation suffers when companies do things the way they’ve always been done. Don’t be afraid to leave business processes behind if they don’t seem like an asset to your business. You can also outsource non-essential tasks to other companies to ensure that your company has more time to focus on scaling up.
7. Don’t Ignore Your Limitations
Ignoring your restrictions can wreak havoc on your business. If you ignore limits, your company could even go bankrupt. That’s what happens with 74% of tech startups who decide to scale up before the time is right. Some limitations to consider are your capital, your current computer systems and how many employees you have.
8. Don’t Cover It Up
Tech companies know everything about IT, but is your IT system currently prepared for scaling up? Before going full steam ahead, ask yourself what the capabilities of your IT system are.
Before scaling, make sure your servers, CRM systems, and all other computing systems are ready to handle a wave of business. Keep in mind that automation can be necessary, though cumbersome, to streamline disparate systems. Assessing the missing connectors and then optimizing these paths is critical to resolving before scaling.
Related: 3 Proven Ways to Grow Your Business Without a Lot of Money
9. Don’t hire in a pinch
Take your time and hire the best people for your business. Don’t feel pressured to hire more people just because you have a vision of scaling up. Hiring more people can also be a sign to slow down to avoid consuming more resources. Scaling is a process. It’s best to have the right people to scale your business rather than semi-skilled workers trying to do their job.
10. Don’t be carelessly optimistic
Optimism is a wonderful quality, but in business you also have to be realistic. Don’t get too excited about an idea or strategy without thoroughly studying and testing it first. There’s no rush and you’ll be glad you looked at multiple strategies instead of settling for the first one that sounded like a great idea.
Be optimistic, but don’t be careless in choosing the best strategy to scale your business. Sometimes the best strategy is to scale up only when you’re completely ready to take on the extra responsibilities.
Scale your business when your company, employees and systems are ready. When it comes to growing your business, timing is everything. The right timing means your business is ready and able to handle strong growth. So scale your business in the right way at the right time.