The word ‘scalable’ gets used a lot these days in relation to business. “You’ve got to build your business so that it’s scalable.” Books tell us to ‘scale up’ our businesses.
But what exactly does being scalable mean for a business?
Let’s look at 5 ingredients we see in businesses that successfully scale and grow…
- The ‘WHY’ of your business
Everything in your business hinges on your vision - your ‘WHY?’. If you can't create a vision, articulate it powerfully to others, and get them to believe in where you intend to go with the business, you are not going to grow, and you’ll never need to worry about scaling your business.
A vision should not be confused with a mission statement. A vision statement talks about the future of where the business should be going, and it should inspire employees as well as provide guidance. A mission statement is about the present state of the business and defines what the business does, who it services, and how it functions.
- A solid team
Once you have a vision of the business you want to build, you are going to need to build a team to help you achieve that vision. No business has ever achieved lasting success without the efforts of a team that worked together to accomplish a vision.
When you go about building a team, you shouldn’t populate it with clones of yourself, as flattering as that might be. Seek out people who have different skills, different strengths, and different perspectives than you do. You need to find people who complement your own knowledge and skill set, and who may be better than you at various aspects of the business. A diversified team will help you scale your business far more easily because of the differences in skills and perspectives.
- Your processes
If you really want to build a scalable business, you need solid processes. Not only do you require solid processes, you need to have them thoroughly and accurately documented.
Build your business and document your processes so well that if you were to die tomorrow, someone could come in, read your business process manual, and know exactly how the business operates.
As your business grows, so will your processes and procedures, which means you will need to update the documentation constantly in order to keep it current and accurate. Not only are documented processes essential for building a scalable business, they’re also crucial when you are considering selling your business.
Think about if you were considering the purchase of a business. If you were considering two businesses with similar sales, and one had a detailed process manual while the other one didn’t, which one would you buy?
It’s a no-brainer.
- Money, money, money
If you are in the process of scaling your business, you are going to need cash, but ironically that is an asset that very few small businesses have in sufficient quantity, at least in the beginning.
This makes it imperative that you learn is how to develop and maintain a good cash flow stream, since it is literally the lifeblood of your business.
Here are 5 tips ideas for establishing good cash flow:
- Create recurring revenue. If you can build a business that has repeatable income at regular intervals, your cash flow will be easier to predict and rely upon.
- Invoice your customers right away, and make it easy for them to pay. I've seen a lot of businesses (ourselves included) hold off on accepting credit cards due to merchant fees. That’s a mistake. Make it easy for people to pay you.
- Build that cost into your service fees, and email invoices that can be paid with the click of a button. (We can show you tools for this.)
- Hold off on paying your bills until they are due. When you get an invoice, don't feel obligated to pay it right away. Instead, check the terms and hold off on paying until a few days before the due date.
- Also, pay with a credit card whenever it is an option, so you can defer the actual transfer of cash as far into the future as possible.
- Sell, sell, sell
If you have completed the steps above, then your business is already pretty scalable. However, when you come right down to it, scaling your business won’t happen without customers and sales.
Growing a business always leads back to marketing and sales.
Even if you create an inspirational vision, get a solid team behind that vision, and have awesome processes, you won’t have much without revenue. If you really want to build a scalable business, you need to learn how to market your product or service, and generate sales.
It is the job of marketing to drive prospects to sales, and it’s the responsibility of the sales team to convert qualified leads into customers. There is no point in converting unqualified prospects into customers because even if they buy, they won’t stay. That’s why it is so important to learn to weed out those prospects who are unlikely to become good long-term customers.
How many of the 5 boxes can you tick right now?
We’re passionate about small business and helping business owners grow and scale their businesses so they become more valuable and easier to sell when that day comes.
If you feel you’re not ticking all boxes in terms of these five key ingredients, and you want some guidance and mentoring in relation to scaling your business, get in touch. We can make a time to have an initial chat over a coffee.
Scaling a business doesn’t happen by accident. But it can—and does—happen… when you have these five ingredients in place.