It’s only when you’re clear on your destination that you can plan a scaling strategy to get there.
It’s only when you have a clear goal in mind can you have a plan to scaling a business in a meaningful way.
The difference between a small startup and a successful profitable company typically boils down to time, experience and planning.
There are certain factors that play a big part in how companies grow to become successful.
1. What is your ultimate goal?
Always have clarity on what your endgame is.
Only by knowing where you want to go can you plan a strategy to get there.
By asking yourself tough questions, you’ll unlock new trains of thought. They will help identify challenges and inspire your creativity to solve them.
What type of company do you want to be? Are you planning to sell your company? If you do, you will have to grow a business that will be attractive to would be buyers.
2. Scale Your business quickly
Once you know your endgame, start planning your strategy that will get you there.
Many small businesses see investments from venture capitalists and angel investors as a obvious way of injecting funds to scale their businesses.
investors expect a 10-fold return on investment. You’d be hard pressed for
results for the cash you secure.
You’ll also have to give up equity and therefore control over your business. It is better to only consider these later on instead of at the start of your entrepreneurial journey.
Consider exploring alternatives so you can grow your business the way you want first.
There are typically three stages that companies go through to secure rapid growth.
This is where most of us begin our journey. Even Bill Gates started Microsoft from his garage!
Tight on cash flow, yet wanting to test an idea’s potential by bringing it to market. What should you do?
It is best to be financially conservative at this stage. Consider crowdfunding. It is the perfect scale strategy because it allows you to prove an idea rapidly without taking a big financial risk.
4. Expand Business by Getting Strategic advice
Every fast-growing business will soon hit a plateau.
This is due to the limited experience and knowledge of the founders.
You will hit this point even if you have owned businesses before.
You will want to seek out strategic advisors to help you scale your business or get to your next destination.
They could provide
- financial expertise
- growth acceleration
- market understanding
- business experience
- logistics structural experience
The right advice will be a catalyst for growth.
The boost they provide your company by fast-tracking your growth would be well worth the fees charged.
5. Outside investment
Once advisors have fuelled initial growth, you can consider strategic partners to scale your business if you want to.
You might look at internet marketing firms, logistics firms or other partners who might complement your business.
They will provide leverage that you didn’t have previously to make a major leap forward.
6. Overcome cash constraints creatively
Regardless of your industry or scale strategy, you will need cash to fund your growth.
Cash liquidity will help you implement the actions necessary for progress.
Below are a few creative options you can explore to overcome the common business hurdle of being cash tight.
7. Create a subscription model
Introducing a monthly subscription model is a great way for getting an additional regular income stream.
Many companies are shifting from a sales model to a subscription model. For example, some wine companies focus on selling subscriptions, where customers receive a fixed number of bottles of wine monthly.
Older strategies concentrate on promoting specific wines.
This model can help you secure a higher multiple should you wish to sell in the future.
Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.
This approach taps into the collective efforts of a large pool of individuals and leverages their networks for greater reach and exposure. It is done primarily online via social media and crowdfunding platforms like Kickstarter.
By tapping into a wider investor pool, you’ll enjoy more flexible fundraising options.
9. Joint ventures
Joint ventures may or may not help scale your business quickly or profitably.
You may want to consider working with complementary businesses who already serve your ideal client.
This is a quick and effective way to build your audience, increase your brand awareness, grow your market share and reach a greater pool of customers.
For example, Hershey’s chocolate partnered with McDonald’s.
By offering Hershey’s chocolate sundaes, Hershey’s increased its sales by capturing McDonald’s clientele.
10. Bank loans Or government support
Traditional bank loans are enjoying relatively low interest rates currently. This means you can secure cash without taking a big risk of having to pay high interest.
Also, governments often support SMEs by providing funding incentives. Remember to explore these as you could benefit greatly if you find a suitable program.
Scaling A Business – It’s a Wrap
Too often, entrepreneurs view asking for help as a sign of weakness.
They think that asking for help means exposing their vulnerable underbelly to predators lurking to harm them.
The most successful entrepreneurs didn’t become effective leaders by having all of the answers all of the time.
They knew to ask for help in order to turn their visions into reality.
At Blazing Conversions, we understand the challenges of scaling your business. Planning and executing a scaling strategy can be hard work.
Contact us and let our team of professionals help plan and scale your business.